chapter 8 administration (financial management) of the estates … · financial management orders...

Chapter 8 – Administration (financial management) of the estates ofincapable people

Contents

8. 1. Introduction

8. 2. Jurisdiction to appoint administrators

8. 3. New South Wales8. 3. 1. Who has jurisdiction to appoint financial managers?8. 3. 2. Who may apply for a financial management order?8. 3. 3. Who may take part in the hearing as a party?8. 3. 4. What has to be proved before an order can be made?8. 3. 5. Appointing a financial manager8. 3. 6. Joint/several/alternate financial managers8. 3. 7. Types of financial management orders8. 3. 8. The jurisdiction of the Mental Health Review Tribunal to makefinancial management orders8. 3. 9. Powers and functions of NSW Trustee as financial manager8. 3. 10. The supervisory role of the Supreme Court in the management ofestates8. 3. 11. The orders the NSW Trustee may give to private financial managers8. 3. 12. Effect of a financial management order8. 3. 13. Reviews of financial management orders8. 3. 14. Dealing with the estate after revocation of the financial managementorder

8. 4. Queensland8. 4. 1. Who has jurisdiction to appoint administrators?8. 4. 2. Who may apply for an administration order?8. 4. 3. Who may take part in the hearing as a party?8. 4. 4. What has to be proved before an order can be made?8. 4. 5. Appointing an administrator8. 4. 6. Joint, several, alternate and successive administrators8. 4. 7. Queensland administration orders8. 4. 8. Powers and functions of an administrator8. 4. 9. Reviews of administration orders

8. 5. South Australia8. 5. 1. Who has jurisdiction to appoint administrators?8. 5. 2. Who may apply for an administrator order?8. 5. 3. Who may take part in the hearing as a party?8. 5. 4. What has to be proved before an order can be made?8. 5. 5. Appointing an administrator

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8. 5. 6. Joint, several and alternate administrators8. 5. 7. Types of administration orders8. 5. 8. Powers of the Supreme and District Courts to make protection orders8. 5. 9. Relationship between Aged and Infirm Persons’ Property Act 1940(SA) Guardianship and Administration Act 1993 (SA)8. 5. 10. Powers and functions of an administrator8. 5. 11. Reviews of administration orders

8. 6. Tasmania8. 6. 1. Who has jurisdiction to appoint financial managers?8. 6. 2. Who may apply for a financial management order?8. 6. 3. Who may take part in the hearing as a party?8. 6. 4. What has to be proved before an order can be made?8. 6. 5. Appointing a financial manager8. 6. 6. Joint/several/alternate administrators8. 6. 7. Types of administration orders8. 6. 8. Powers and duties of an administrator8. 6. 9. Administrators may seek advice8. 6. 10. Reviews of administration orders8. 6. 11. Parties to reviews of guardianship orders8. 6. 12. Powers of the Board on review

8. 7. Victoria8. 7. 1. Who has jurisdiction to appoint financial managers?8. 7. 2. Who may apply for an administration order?8. 7. 3. Who may take part in the hearing as a party?8. 7. 4. What has to be proved before an order can be made?8. 7. 5. Appointing an administrator8. 7. 6. Joint/several/alternate administrators8. 7. 7. Types of administration orders8. 7. 8. The role of VCAT after making an administration order8. 7. 9. Powers and duties of administrators8. 7. 10. Effect of a financial management order8. 7. 11. Requested rehearings8. 7. 12. Reassessments of administration orders

8. 8. Western Australia8. 8. 1. Who has jurisdiction to appoint administrators?8. 8. 2. Who may apply for an administration order?8. 8. 3. Who may take part in the hearing as a party?8. 8. 4. What has to be proved before an order can be made?8. 8. 5. Appointing an administrator8. 8. 6. Joint/concurrent/alternate administrators8. 8. 7. Types of administration orders

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8. 8. 8. Obligations and functions of an administrator8. 8. 9. The role of Tribunal after making an administration order8. 8. 10. Reviews of administration orders8. 8. 11. Powers of the Tribunal on review

8. 9. Australian Capital Territory8. 9. 1. Who has jurisdiction to appoint financial managers?8. 9. 2. Who may apply for a management order?8. 9. 3. Who may take part in the hearing as a party?8. 9. 4. What has to be proved before an order can be made?8. 9. 5. Appointing a financial manager8. 9. 6. Joint/several/replacement managers8. 9. 7. Types of management orders8. 9. 8. Injunctions to restrain dealings8. 9. 9. Effect of a management order8. 9. 10. The role of Tribunal after making a management order8. 9. 11. Powers and functions of a financial manager8. 9. 12. Reviews of management orders8. 9. 13. Parties to reviews of management orders8. 9. 14. Powers of ACAT on review

8. 10. Northern Territory8. 10. 1. Who has jurisdiction to appoint financial managers?8. 10. 2. Who may apply for an administration order?8. 10. 3. Who may take part in the hearing as a party?8. 10. 4. What has to be proved before an order can be made?8. 10. 5. Appointing a manager8. 10. 6. Joint/several/alternate financial managers8. 10. 7. Types of financial management orders8. 10. 8. Powers and functions of a financial manager8. 10. 9. Effect of a protection order or management order8. 10. 10. Reviews of financial management orders

8. 11. General matters8. 11. 1. Purpose of administration orders8. 11. 2. Who may apply for an order8. 11. 3. Who should have notice of the hearing of the application?8. 11. 4. Tests for making administration orders8. 11. 5. The incapacity criterion8. 11. 6. Deciding the incapacity issue8. 11. 7. The need criterion8. 11. 8. The best interests criterion8. 11. 9. Onus of proof8. 11. 10. Standard of proof8. 11. 11. Who to appoint as administrator – a “checklist” of considerations

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8. 11. 12. Appointing private managers8. 11. 13. Effect of administration orders8. 11. 14. Functions and powers of administrators8. 11. 15. Reviews of administration orders

8. 12. The assessment of financial capacity: the role of the expert8. 12. 1. Understanding the concept8. 12. 2. The legal tests8.12. 3. The assessment of capacity8.12.4. Report writing

8. 1. IntroductionCentral to the modern guardianship and administration of estates systems inAustralia is the power given to guardianship tribunals of the States and theAustralian Capital Territory to make orders appointing others to manage theproperty and affairs of incapable adults. These orders are known asadministration orders in all the States, except New South Wales where they arecalled financial management orders, if they are made by a tribunal. They mayhave different names if made by courts. In New South Wales they are calledfinancial management orders, in the Australian Capital Territory, managementorders and in the Northern Territory they are management orders if made bythe Local Court and protection orders if made by the Supreme Court.

However, as is already clear from other chapters of this book, the guardianshipand administration of estates systems in the different States and Territories ofAustralia are essentially the same, but have sufficient differences between themfor it to be necessary to deal with each State and Territory’s system separately.Also, as many of the provisions that apply to the making of administrationorders have already been discussed in Chapters 6 and 7 dealing with theappointment of guardians and their functions or powers, particularly Chapter 7,there will be appropriate cross references to those chapters in this chapter.

This chapter sets out which bodies have jurisdiction to make administrationorders in each State and Territory. It also sets out how applications for thoseorders are made, by whom, who may be involved in the hearing process andwhat the criteria are for making such orders. The chapter deals with theprocesses for reviewing administration orders and the criteria that are relevantto the review process.

In New South Wales the Guardianship Tribunal makes the majority ofadministration orders, but unlike its counterparts elsewhere in Australia doesnot give administrators their powers to carry out their functions andresponsibilities as administrators. Nor do administrators report to it. Since mid2009 when the office of Protective Commissioner was abolished, the NSWTrustee has been giving administrators directions as to how they are toadminister the estates they have been appointed to manage, and administrators

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have been accounting to the NSW Trustee. In the other States and the twoTerritories the relevant tribunal gives the administrators their powers eitherdirectly by setting them out in the appointment order or by appointingadministrators whose appointment vests them with powers that the tribunalappointing them may be able to limit by conditions and limitation or add to inthe appointment order. In Victoria, Queensland and Tasmania theadministrators report to the tribunal. In South Australia private administratorsreport to both the Guardianship Board and the Public Trustee while the PublicTrustee reports to the Guardianship Board. In Western Australia and theAustralian Capital Territory, private administrators report to the Public Trustee,but there is no provision for the Public Trustee to report to the tribunal thatappointed them in either jurisdiction. In the Northern Territory, a guardianappointed by the Local Court as a manager is required, at least once a year, togive the Executive Officer an account of their management of the person'sestate.

In this chapter the powers and functions that the NSW Trustee automaticallyhas when appointed as administrator in New South Wales and the powers shemay give to private administrators are set out in detail together with the powersthat VCAT may give to administrators it appoints in Victoria. The powers,function and requirements imposed on family members and friends appointedas administrators in Queensland are set out in the general section of the chapterreferred to in the next paragraph as it is suggested that they apply toadministrators appointed in the other States and Territories of Australia. Thepowers and functions of administrators are not dealt with in the same amountof detail.

There are a number of issues common to each of the eight guardianship andadministration of estates systems in the country. Where possible, these issuesare drawn out and discussed later in the chapter.

The chapter also discusses the role of health care professionals in the makingand reviewing of administration orders.

8. 2. Jurisdiction to appoint administratorsAs noted in Chapter 5, one of the key aims of the modern guardianship andadministration of estates systems in Australia has been to make the seeking andobtaining of administration orders much cheaper and more accessible to thosewho need to get the orders than previously. As a result, applications foradministration orders in the States and the Australian Capital Territory aremade to tribunals. The situation in the Northern Territory is more complicatedas will be explained at 8. 8.

In New South Wales the Supreme Court not only retains its statutory as well asits parens patriae jurisdiction, but regularly uses it to make financialmanagement orders. In the Northern Territory, the Supreme Court may make

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administration orders called “protection orders” in relation to those who meetthe criteria set out in the Aged and Infirm Persons’ Property Act 1979 (NT).1

However, in Victoria, Morris J has doubted that the Supreme Court’s parenspatriae jurisdiction “should play any current role in the day to dayadministration of guardianship [and administration] matters” because ofVictoria’s comprehensive laws in relation to those matters.2 The question ofwhich tribunals and courts are empowered to appoint administrators in each ofthe States and Territories is discussed in more detail below.

8. 3. New South Wales8. 3. 1. Who has jurisdiction to appoint financial managers?In New South Wales the Supreme Court, the Guardianship Tribunal, and theMental Health Review Tribunal may, and regularly do, make financialmanagement orders.3 In addition to its statutory jurisdiction under the NSWTrustee and Guardian Act 2009 (NSW), the Supreme Court retains the inherent,parens patriae jurisdiction it has had since it came into existence in 1824. In a1987 case Powell J of the Supreme Court of New South Wales noted that thejurisdiction of the Court to make orders for the management of property of aperson with unsound mind or incapable of managing their affairs may be foundin a variety of sources including the inherent jurisdiction of the Court inrelation to those of unsound mind and the jurisdiction given to the Court by theProtected Estates Act 1983 (NSW) which has now been superseded by the NSWTrustee and Guardian Act 2009 (NSW).4 The Guardianship Tribunal’sjurisdiction in relation financial management issues is found in theGuardianship Act 1987 (NSW).5 In June 2010, the Mental Health ReviewTribunal took over, from the magistrates, the jurisdiction to make financialmanagement (administration) orders in relation to those who are going throughthe process of being admitted to a mental health facility.6

In summary, the Guardianship Tribunal, the Supreme Court and the MentalHealth Review Tribunal have jurisdiction, arising from different sources, tomake administration orders as follows:

1. Guardianship Tribunal, under the Guardianship Act 1987 (NSW),2. Supreme Court, under the NSW Trustee and Guardian Act 2009 (NSW),3. Supreme Court, under the parens patriae element of its inherent

jurisdiction,

1 Aged and Infirm Persons’ Property Act 1979 (NT), ss 11 and 12.2 Gardner; re BWV [2003] VSC 173, [99], 7 VR 487.3 For the Supreme Court see, NSW Trustee and Guardian Act 2009 (NSW) s 41; for the GuardianshipTribunal see, Guardianship Act 1987 (NSW) s 25E and for the Mental Health Review Tribunal seeMental Health Act 2007 (NSW) s 34 and the NSW Trustee and Guardian Act 2009 (NSW) ss 43-50.4 McI v McI (1987) 10 NSWLR 243, 244-245.5 Guardianship Act 1987 (NSW) ss 25D-25U.6 See Courts and Crimes Legislation Further Amendment Act 2008 (NSW) Sch 16 and the SecondReading Speech relating to the bill for that Act, Hansard Transcript ( NSW), Legislative Council, 27November 2008, Second Reading , 6.

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4. Mental Health Review Tribunal conducting mental health inquiriesunder the Mental Health Act 2007 (NSW),

5. Mental Health Review Tribunal, in relation to those in mental healthfacilities, under the NSW Trustee and Guardian Act 2009 (NSW).

As the Guardianship Tribunal makes far more financial management ordersthan the Supreme Court and the Mental Health Review Tribunal, its role will bediscussed in more detail than those bodies. The jurisdiction of the MentalHealth Review Tribunal both when conducting mental health inquiries andwhen making financial management orders later during a person’s admission toa mental health facility is dealt with as a separate matter at 8. 3. 8. It should benoted that the Guardianship Tribunal may deal with applications to makefinancial management orders in relation to patients under the Mental HealthAct 2007 (NSW).7

8. 3. 2. Who may apply for a financial management order?8. 3. 2. 1. Guardianship TribunalSimilar to applications for guardianship orders, applications for financialmanagement orders may be made to the Tribunal by:

1. any person who, in the opinion of the Tribunal, has a genuine concernfor the welfare of the person who the application is about, or

2. the NSW Trustee.8

8. 3. 2. 2. Supreme CourtApplications to the Supreme Court for management orders are made accordingto the requirements of the Supreme Court Rules.9 It is usual for the applicant,the plaintiff, to be a relative; however it is not essential that the applicant be arelative and another person, often described in legal cases and texts as a“stranger” may apply. This will be the case where there are no relatives tobring the application or where it is alleged that family members are mistreatingthe incapable person physically or misusing their estate.10

8. 3. 3. Who may take part in the hearing as a party?8. 3. 3. 1. Guardianship TribunalThe automatic parties to an application to the Tribunal for a financialmanagement order are listed below. As parties they may attend the hearing ofthe application, give evidence and make submissions to the Tribunal as well ascall witnesses and cross examine other witnesses.11 They may also appeal

7 XC v Protective Commissioner [2006] NSWADTAP 64.8 Guardianship Act 1987 (NSW).s 25I.9 Uniform Civil Procedure Rules 2005 (NSW), Part 57.10 Porter, B and Robinson, M, Protected Persons and their Property in New South Wales, Sydney, LawBook Company, 1987, 41-42. As an example of an application by a “stranger” see, In the Matter of anAlleged Incapable Person (1959) 77 W.N. (NSW) 156.11 Ibid. s 59.

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against the decision of the Tribunal.12 They may seek leave to be representedby a lawyer or agent at the Tribunal hearing.13 They are:

1. the applicant,

2. the person the application is about,

3. the spouse, if any, of that person, if their relationship with that person isclose and continuing,

4. the person, if any, who has care of that person,

5. the person, if any, appointed attorney by the person to whom theapplication relates under a power of attorney that is in force, and

6. the NSW Trustee.14

The Tribunal may join others as parties to the application.15 Joined parties havethe same rights as automatic parties.

8. 3. 3. 2. Supreme CourtThe parties to applications to the Supreme Court for management orders areusually confined to the applicant as plaintiff and the person the hearing is aboutas defendant. The Supreme Court Rules apply.16

8. 3. 4. What has to be proved before an order can be made?8. 3. 4. 1. Guardianship TribunalBefore the Tribunal may make a financial management order, it must conduct ahearing at which it considers the capability of the person the hearing is about tomanage their own affairs and must be satisfied as to the following matters,namely that:

1. the person is not capable of managing their own affairs,

2. there is a need for another person to manage those affairs on theperson’s behalf, and

3. it is in the person’s best interests that the order be made.17

These criteria, and the criteria applied by the Supreme Court and courts andtribunals around the country are discussed later in this chapter at 8. 11. 5. to 8.11. 8.

12 Ibid. ss 67 and 67A and Administrative Decisions Tribunal Act 1997 (NSW) s 67(2A), (2B) and(2C).13 Guardianship Act 1987 (NSW) s 58.14 Ibid. s 3F(5)15 Ibid. s 57A.16 Uniform Civil Procedure Rules 2005 (NSW), Part 57.17 Guardianship Act 1987 (NSW) s 25G.

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8. 3. 4. 2. Supreme CourtThe Supreme Court has a discretion to make an order that a person’s estate besubject to management if it is satisfied that the person is incapable of managingtheir affairs.18 The formal process of the Court is:

1. to make a declaration that the person is incapable of managing theirfinancial affairs,

2. to order that their estate be subject to management under the NSWTrustee and Guardian Act 2009 (NSW), and

3. by order appoint either a suitable person or the NSW Trustee as managerof the estate of the incapable person.19

As already noted, the criteria applied by the Supreme Court before making itsdeclaration and appointment order are discussed later in this chapter at 8. 11. 5to 8. 11. 8. The procedures of the Court to be followed in relation to anapplication under section 41of the NSW Trustee and Guardian Act 2009 (NSW)are set out in the Supreme Court Rules and in the Act.20

8. 3. 5. Appointing a financial manager8. 3. 5. 1. Guardianship Tribunal and the Supreme CourtWhen either the Tribunal or the Court makes a financial management order, itmust either:

1. appoint a suitable person as (private) manager of the estate, or

2. commit the management of that estate to the NSW Trustee.21

In the Supreme Court, but not the Guardianship Tribunal, unless it is proposedthat the estate of the person the hearing is about is to be committed to the NSWTrustee for management or to be managed by the applicant, the proposedmanager must consent, in the prescribed form, to being appointed the manager.Furthermore, unless the proposed manager is the NSW Trustee or a trusteecompany, affidavits must be given by at least two persons giving their opinionof the proposed person’s character, their fitness to act and details of theirbusiness experience.22

In the leading New South Wales Court of Appeal case on the matters to beconsidered when deciding who to appoint as financial manager, Kirby P notedthat the legislation provided first that a “suitable person” should be appointed

18 NSW Trustee and Guardian Act 2009 (NSW) s 41(1).19 Ibid.20 Uniform Civil Procedure Rules 2005 (NSW), Part 57 and NSW Trustee and Guardian Act 2009(NSW) s 41(2) and (3). See also Porter and Robinson op cit (footnote 12), 39-51.21 Guardianship Act 1987 (NSW) s 25M (Guardianship Tribunal) and NSW Trustee and Guardian Act2009 (NSW) s 41(1) (Supreme Court).22 Uniform Civil Procedure Rules 2005 (NSW), Part 57 and Porter and Robinson op cit (footnote 12),46-47.

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as manager of the estate of a person the subject of a financial managementorder and only secondly that the management of that estate should becommitted to the NSW Trustee.23 He described this as a sensible hierarchy ofchoices pointing out that:

In many estates of modest size it will be appropriate where there is norisk of conflict of interest and duty, and where a relationship of love oraffection is established, to reflect in the statutory appointment the formof management which for millennia, in primitive societies as in civilisedcommunities, has been followed when a family member is found to beincapable of managing his or her affairs. It is normal then for the familyto step in.24

Despite this limiting view of who should be appointed manager, he insisted thatthe discretion to appoint and remove a financial manager was a broad one thatshould not be confined “by rigid rules” or even ‘guidelines’ expressed ingeneral terms. He then went on to provide a checklist of considerations to beborne in mind when exercising the discretion as to who to appoint as manager,with the “abiding rule” being the achievement of the best interests of the personthe hearing is about.25 A summary of the checklist is set out below.26

He also noted that, in earlier times and before the advent of the modernguardianship and administration system, the courts conserved their interventionto cases where there was no family or where no family member was willing toact or where for special reasons of incompetence or conflict of interest it wasunsuitable to appoint a family member. He then pointed out that there was adanger in the administration of the legislation of overlooking not only that thisas the natural order of things but also that it was the way parliament hadreflected the matter in the legislation by referring to the appointment of asuitable person ahead of committing the management of the estate to the NSWTrustee.27

It should be noted however, that the Tribunal deals with a significant number ofcases in which it is precisely because there is no family or no family willing totake on the role of financial manager that the Tribunal commits themanagement of the estate to the NSW Trustee. At other times, and often at therequest of or with the support of family members, the Tribunal appoints theNSW Trustee in order to have a body outside the family managing the financialaffairs of the incapable person. At other times the appointment is made forreasons of incompetence or conflict of interest or intra-family conflict which

23 Holt v Protective Commissioner (1993) 31 NSWLR 227, 238. In Re R [2000] NSWSC 886, [48]Young J said: “The authorities show that if one can have members of the family manage an incapableperson’s estate then that is often the preferred course”. However, the court or tribunal appointing theprivate manager has to be satisfied as to other matters. See 8. 11. 13 and 14.24 Holt v Protective Commissioner (1993) 31 NSWLR 227, 238-239.25 Ibid. 241.26 See 8. 11. 13.27 Ibid. 339.

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makes it not in the incapable person’s best interests to appoint a familymember.

Nevertheless, in a 2006 case the Appeal Panel of the Administrative AppealsTribunal stated that “if the Guardianship Tribunal did not look first to thepossibility of appointing a suitable person to be the manager of the protectedperson’s estate or considered any potential conflict of interest to be an"absolute bar" to [a family member’s] appointment as a manager, then it willhave made an error of law”.28 While the Appeal Panel did not find an error oflaw on the facts of the case, its statement of the law reflects a rigidity ofapproach that is inconsistent with the broad discretion to be exercised inappointing financial managers and the abiding rule of achieving the bestinterests of the incapable person.

While care has to be taken to ensure that a financial manager will abide by thelimits of the authorities and directions as to the management of the estates theyare appointed to manage, and will account annually to the NSW Trustee on themanagement of those estates, the Guardianship Tribunal occasionally appointsas financial managers persons who are not resident in New South Wales if theyare otherwise suitable for appointment.

Where a private person is appointed as manager, they may not begin to managethe estate until the NSW Trustee has authorised them to exercise functionsrelating to the estate or, directions of the Supreme Court relevant to themanagement of the estate have been obtained. Nevertheless, a manager maytake such action as may be necessary for the protection of the estate, includingaction specified by the Tribunal, pending the directions of the Court orauthorisation by the NSW Trustee.29

8. 3. 6. Joint/several/alternate financial managers8. 3. 6. 1. Guardianship Tribunal and Supreme CourtThe Tribunal may, and sometimes does, appoint more than one financialmanager. When the Tribunal does this, those appointed must act jointly and allagree with the decisions made during the management of the estate. However,as Powell J of the New South Wales Supreme Court pointed out in a 1982 case,it is the duty of the appointing authority to keep the administration of an estatesimple and inexpensive, particularly if it is comparatively small anduncomplicated. Hence the appointment of multiple managers is to be avoided,especially if there is antipathy and mistrust between them.30

28 SH v Protective Commissioner [2006] NSWADTAP 4 [25]. The Tribunal on the other hand hasconsidered that it has a complete discretion to appoint either a private manager or the ProtectiveCommissioner under the “abiding rule” of achieving the best interests of the person whose estate is tobe placed under management. See, Matter no 2003/2438 (unreported, Guardianship Tribunal, 16December 2003).29 Guardianship Act 1987 (NSW) s 25M.30 RAP v AEP [1982] 2 NSWLR 508. For an example of this becoming apparent during the course of anadministration order see, Matter no. 92/0799 (unreported, Guardianship Board (Tribunal), 10 April1992).

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Because it is appropriate for managers to have all the powers of a manager andfor all managers to be able to exercise all their powers over all the estate, or atleast as much of the estate that is under management, it is not sensible toappoint one manager with some powers over some of the estate and anotherwith different powers. Nor is it sensible to appoint one manager for part of theestate and another manager for another part.

None of the Supreme Court, Guardianship Tribunal, Magistrates conductingmental health inquiries and the Mental Health Review Tribunal has statutorypower to appoint alternate financial managers. Consequently, if the financialmanager dies or becomes incapable, an application has to be made for anothermanager to be appointed.

8. 3. 7. Types of financial management orders8. 3. 7. 1. Plenary ordersIn New South Wales all financial management orders made by the SupremeCourt and most such orders made by the Guardianship Tribunal are plenaryorders covering all of a person’s estate.

8. 3. 7. 2. Orders with part of the estate excludedThe Guardianship Tribunal may exclude a specified part of a person’s estatefrom a financial management order. This is not the same as deciding what partof the person’s estate is placed under management. In New South Wales afinancial management order applies to all of the person’s property and affairsunless the Tribunal specifically excludes part of the person’s estate frommanagement and specifies, with precision, that part of the estate that isexcluded from management.

8. 3. 7. 2. Interim ordersThe Guardianship Tribunal may make interim financial management orders forspecified periods, not exceeding 6 months, pending the Tribunal’s furtherconsideration of the capability of the person about whom the order is made tomanage their own affairs.31 This power is limited intentionally. It is intended tobe used where there is an urgent need to make the order in a person’s bestinterests, but where there has been insufficient time to obtain a satisfactorylevel of evidence, through medical examinations or other sources ofinformation, to show that the person lacks capacity to manage their ownfinancial affairs or where there is some doubt about the person’s capacity tomanage those affairs and time is needed to obtain that evidence.

The Tribunal may not make an interim financial management order unless ithas before it an evidential basis for believing that the person may be incapableof managing their own financial affairs and that they need an order. Theseorders are not to be used as short term financial management orders if theevidence of the person’s incapacity is available. In that case, the proper course

31 Guardianship Act 1987 (NSW) s 25H.

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is to apply the tests for making a final order, and, if the order is made, toprovide an early date for its review. It is not legitimate to make an interimfinancial management order where a short term order appears to be needed inthe knowledge that such an order will be taken to have been revoked if theperiod for which it is made expires and no further interim order or no finalorder has been made.32

While the wording of the legislative provision empowering the Tribunal tomake interim financial management orders does not preclude the making ofmore than one such order either through clear words or necessary implication, asecond interim order following immediately upon a first order should not bemade unless there are legitimate difficulties in obtaining the evidence of theperson’s incapacity and the evidence is likely to become available if the furtherorder is made.

While the legislation appears to limit the circumstances in which such an ordercan be sought, interim financial management orders can be sought:

1. during an application for either a guardianship or a financialmanagement order,33

2. for a person who is already under guardianship, whether just placedunder guardianship or having been under guardianship for some time,34

3. during the review of an appointment of an enduring guardian,35 or

4. during the review of an appointment of an enduring power of attorney.36

Where an interim order is made, the usual practice is to adjourn the applicationfor a full financial management order or other relevant application so that therequired evidence can be gathered and to bring the matter back on for hearingbefore the time provided for in the interim order has expired. Interim financialmanagement orders are taken to be revoked when the time for their expiry isreached.37

8. 3. 7. 3. Supreme CourtWhile the Supreme Court has no legislative power to make interim financialmanagement orders, it has inherent jurisdiction to make interim orders toprotect the estates of, as noted by Lord Eldon in Ridgeway v Darwin, “allpersons who were ‘unable to act with any proper and provident management’who were ‘liable to be robbed by anyone’ whether they were, strictly speaking,insane or not because the mischief called for as much protection as actual

32 Ibid. s 25H(1)and (2).33 Ibid. s 25H(2)(b).34 Ibid. s 25H(2)(a).35 Ibid. ss 6K(3) and 25H(1).36 Ibid. s 25H(1) and Powers of Attorney Act 2003 (NSW) s 37(1).37 Ibid. s 25H(3). For an example of an interim order resolving the problem and overcoming the needfor a final order see, Matter no. 92/1808 (unreported Guardianship Board (Tribunal), 22 July 1992).

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insanity”.38 As Young J pointed out as he proceeded to appoint an interimreceiver and manager on an urgent summons that the judge proceeded to hearwithout it being served on the person the hearing was about, the requirementwas that the applicant:

[M]ust then show that there is a strongly arguable case that thedefendant is a person who falls within the class specified by Lord Eldonin Ridgeway v Darwin, at least in the short term. The evidence need notgo so far as to show that two medical practitioners or a medicalpractitioner and a psychologist consider that the defendant is incapableof managing his or her affairs, but the evidence must at least show astrongly arguable case that immediate protection is needed to preservethe defendant's property.39

8. 3. 8. The jurisdiction of the Mental Health Review Tribunal to makefinancial management orders8. 3. 8. 1. Mental health inquiries conducted by the Mental Health ReviewTribunalWhen a person is taken to a mental hospital or other mental health facility, theymust be examined as soon as possible, and in any event within 12 hours afterthey arrive at the hospital or other facility. The same requirements forexamination apply if the person has gone to the mental hospital or other mentalhealth facility as a voluntary patient and it is subsequently believed that theyshould be detained there for treatment on an involuntary basis. Theexamination must be carried out either by the medical superintendent or amedical officer at the hospital. Unless the examining doctor certifies that theyare a mentally ill or a mentally disordered person, the person must not bedetained after the examination.40 If the person is certified to be either amentally ill or mentally disordered person, they must be examined by a seconddoctor and that doctor must be a psychiatrist if the first examining doctorwasn’t. There are further provisions about medical examinations and if themedical opinion is that the person is either a mentally ill or mentally disorderedperson, then they must be brought before the Mental Health Review Tribunalfor a mental health inquiry as soon as practicable.41

It is the obligation of the medical officer who conducts the examination orcauses other doctors to conduct the examination to bring the person before theMental Health Review Tribunal for a mental health inquiry. The medicalofficer must give the person written notice of the inquiry and that notice mustadvise that, if the Mental Health Review Tribunal considers that the personshould be detained, the Tribunal will also have to consider whether or not the

38 Drew v H [1999] NSWSC 610 [8]-[9]. Ridgeway v Darwin (1802) 32 ER 275, 276.39 Drew v H [1999] NSWSC 610 [15]. See also, DW v CB (unreported, NSW Supreme Court, Powell J,12 August 1992).40 Mental Health Act 2007 (NSW) ss 4 and 27.41 Ibid. and s 34.

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person is able to manage their own affairs.42 This notice must be given as soonas the medical officer is aware that the person is one for whom an inquiry isrequired to be held.43

The mental health inquiry must be arranged by either the medicalsuperintendent of mental hospital or other mental health facility or a doctorattached to that hospital or other facility and authorised by the medicalsuperintendent. The parties to such an inquiry are:

1. the applicant doctor,2. the person the inquiry is about, and3. their primary carer, if they can be served.44

The doctor arranging the mental health inquiry must advise the person that allreasonably practicable steps will be taken to give notice of the inquiry to theperson’s primary carer and then take those steps.45 The primary carer of aperson is:

1. their guardian,

2. their parent if the person is a child, unless the child has made anomination referred to in 3,

3. if the person is over the age of 14 years and not under guardianship, theperson nominated by them as their primary carer,

4. if 1, 2 or 3 do not apply then,(i) the person’s spouse of the, if any, if the relationship between theperson and their spouse is close and continuing,(ii) any person who is primarily responsible for providing support orcare to the person (other than wholly or substantially on a commercial

42 The following statement is set out under the heading, “What happens at a mental health inquiry?” inSchedule 3 of the Mental Health Act 2007 (NSW):

If Mental Health Review Tribunal makes an order that you are to remain in a mental healthfacility as an involuntary patient, Mental Health Review Tribunal must also consider whetheryou are capable of managing your financial affairs. If Mental Health Review Tribunal is notsatisfied that you are capable, an order must be made for the management of your affairsunder the NSW Trustee and Guardian Act 2009 (NSW).

Note that under ss 44, 45 and 46 the Mental Health Review Tribunal has to be satisfied that apatient is not capable of managing their (financial) affairs before a management order may bemade in relation to them. See 8. 3. 8. 2 below.

43 Ibid. ss 34 and 76 and Schedule 2 Item 2; Mental Health Regulations 2007 (NSW) cls. 5 and 7 andForm 2.44 Mental Health Act 2007 (NSW) ss 34 and 76 and Schedule 2. The term “primary carer” is defined ins 71 of that Act.45 Mental Health Act 2007 (NSW) s 76.

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basis), or(iii) a close friend or relative of the person.46

If, after holding the mental health inquiry, the Mental Health Review Tribunaldirects that the person must be detained in a mental hospital or other mentalhealth facility as an involuntary patient, the Tribunal must deal with thequestion of the person’s capability to manage their own affairs under the NSWTrustee and Guardian Act 2009 (NSW).47 That matter is dealt with at 8. 3. 8. 2below.

8. 3. 8. 2. Mental Health Review TribunalThere are various situations in which the Mental Health Review Tribunal hasjurisdiction to make financial management orders.

The first is where it is conducting a mental health inquiry, as discussed in 8. 3.2. 1 above.48 If, after conducting the inquiry, the Tribunal orders that the personthe subject of the inquiry is to be detained in a mental health facility, theTribunal must consider whether or not the person is capable of managing theirown (financial) affairs and if satisfied that the person is not capable ofmanaging their own affairs, must order that their estate be subject tomanagement under the NSW Trustee and Guardian Act 2009 (NSW) andcommit the management of the person’s estate to the NSW Trustee.49 Theparties to such a hearing are:

1. the applicant doctor,2. the person the inquiry is about, and3. their primary carer if they can be served.

The second is where the Tribunal is reviewing a person’s case under Part 5 ofthe Mental Health (Forensic Provisions) Act 1990 (NSW).50 Again if, afterconducting the review, the Tribunal orders that the person the subject of theinquiry is to be detained in a mental health facility, the Tribunal must considerwhether or not the person is capable of managing their own (financial) affairsand if satisfied that the person is not capable of managing their own affairs,must order that their estate be subject to management under the NSW Trusteeand Guardian Act 2009 (NSW) and commit the management of the person’sestate to the NSW Trustee.51

46 The term “close friend or relative” of a person means a friend or relative who maintains both a closepersonal relationship with the person through frequent personal contact and a personal interest in theirwelfare and who does not provide support to the person wholly or substantially on a commercial basis.See, Mental Health Act 2007 (NSW) s 71.47 NSW Trustee and Guardian Act 2009 (NSW) s 44.48 Ibid. s 44.49 Ibid. ss 44 and 52.50 Ibid. s 45.51 Ibid. ss 45 and 52.

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The third situation is where a person who, in the opinion of the Tribunal has asufficient interest in the matter, makes an application to the Tribunal for afinancial management order to be made in relation to a patient in a mentalhealth facility.52 Whether or not it has previously considered the question, theTribunal may consider a person’s capability to manage their own affairs. If theTribunal is satisfied that the person not capable, it must order that the person’sestate be subject to management under the NSW Trustee and Guardian Act2009 (NSW) and commit the management of the person’s estate to the NSWTrustee.53 Where such an application is made, the parties to the hearing wouldbe:

1. the applicant, and2. the person the hearing is about.

It is suggested that the language of sections 44 and 45 of the NSW Trustee andGuardian Act 2009 (NSW) makes it mandatory for the Tribunal to consider thecapacity to manage their (financial) affairs of a person it has ordered to bedetained in a mental health facility immediately after it has made the detentionorder in relation to them, and if the Tribunal is satisfied that the person is notcapable of managing their (financial) affairs, it must make a financialmanagement order in relation to them. There does not appear to be anydiscretion in the Tribunal not to make the order if it finds the patient notcapable on the grounds that the patient has put other arrangements in place, likehaving appointed an attorney under an enduring power of attorney to handletheir financial affairs when they, the patient with a mental illness, are unwelland need someone to manage their financial affairs for that time only.However, it may make sense in most cases in which a patient is detained in amental health facility to have the Public Trustee managing their financialaffairs as they, the patients, would usually, because of the state of their illnessor the physical reality of their detention, be unable to manage their affairsthemselves.

In relation to a subsequent application in relation to a patient, the language ofsection 46 indicates that the Tribunal has a discretion as to whether or not itneeds to consider the person’s capacity to manage their (financial) affairs.However, if the Tribunal does consider the application, and is satisfied that theperson is not capable of managing their affairs, the section appears to requirethe Tribunal to make an order that the estate of the person be subject tomanagement under the NSW Trustee and Guardian Act 2009 (NSW) andcommit the management of the person’s estate to the NSW Trustee eventhough there may have been no change in the person’s capability to manage

52 Ibid. s 46. A patient is formally defined as a person who is admitted to a mental health facility inaccordance with the Mental Health Act 2007 (NSW) and who is in the facility following the person’sadmission. The definition includes a person so admitted while they are absent from the facility eitherwith or without leave of absence. See, Mental Health Act 2007 (NSW) s 4 and NSW Trustee andGuardian Act 2009 (NSW) s 38.53 NSW Trustee and Guardian Act 2009 (NSW) ss 46 an 52.

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their own affairs since that capability was last considered by the Tribunal or theSupreme Court.54

There appears to be a conflict between the mandatory requirements of sections44, 45 and 46 of the NSW Trustee and Guardian Act 2009 (NSW) and section39 of that Act which sets out applicable general principles. These principlesapply to the Mental Health Review Tribunal and require it, when dealing with apatient’s capacity to manage their (financial) affairs, to:

1. Give paramount consideration to the patient’s welfare and interests;

2. Restrict the patient’s freedom of decision and freedom of action as littleas possible;

3. Encourage patients, as far as possible, to live a normal life in thecommunity;

4. Take the views of the patient into consideration;

5. Recognise the importance of preserving family relationships and culturaland linguistic environments;

6. Encourage the patient, as far as possible, to be self-reliant in mattersrelating to their personal, domestic and financial affairs; but also

7. Protect the patient from abuse, exploitation or neglect.

These principles suggest that the Tribunal should exercise a discretion not tomake a financial management order in some situations where the patient wasincapable of managing their financial affairs. For example, where to make anorder would so retard the patient’s recovery because of their agitation about theorder that it would be contrary to the particular patient’s welfare and interests,as well as their views, to make the order. Another example of where it wouldbe consistent with the principles not to make a financial management order iswhere the person has already appointed an attorney under an enduring power ofattorney to handle their financial affairs when they are unwell and needsomeone to manage their financial affairs for the period of their unwellnessonly.

8. 3. 8. 3. Interim financial management orders made by the Mental HealthReview TribunalThe Mental Health Review Tribunal, when exercising any of its financialmanagement jurisdictions, may, if it appears to it either necessary orconvenient to do so, make an interim financial management order appointingthe NSW Trustee the manager of a person’s estate for a period of up to sixmonths pending further consideration of that person’s capability to managetheir own affairs.55 An interim financial management order will expire six

54 Ibid. s 46(2) and (3)55 Ibid. ss 47 and 48.

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months after it is made if it is not reviewed within that time. If a review isbegun within the six month period, the interim order will expire at the end ofthe review.56 However, the Tribunal may, after further consideration of thepatient’s capacity to manage their (financial) affairs, be satisfied that do nothave that capacity and make a financial management order or, not being sosatisfied, revoke the interim financial management order and end theproceedings.

8. 3. 9. Powers and functions of NSW Trustee as financial managerMost financial management orders made in New South Wales by theGuardianship Tribunal and the Supreme Court and all those made by theMental Health Review Tribunal involve committing the management of theestate to the NSW Trustee (appointing the NSW Trustee as financial manager).

The NSW Trustee has and may exercise all the functions the person wouldhave had and could have exercised when or if they had capacity.57 In addition,the NSW Trustee may exercise all functions that are necessary for themanagement and care of the estate as well as any other functions given to herby the Supreme Court or the Guardianship Tribunal.58 The Tribunal’s power togive extra functions is, for reasons that are unclear, limited to situations inwhich the person whose affairs were being managed was also underguardianship.59 The NSW Trustee may also execute and sign any document onbehalf of the incapable person while managing their estate.60

The NSW Trustee and Guardian Act 2009 (NSW) sets out the specific purposesfor which the NSW Trustee may spend money from an estate undermanagement, namely:

1. the payment of the debts and engagements of the person and therepayment of expenses chargeable to their estate,

2. the person’s funeral expenses, but only after their death,3. the maintenance of the spouse of the person or any child, parent or other

person dependent upon the person, or for whose maintenance the personprovided when not a managed person or would be expected to provide,

4. the payment of all proper costs incurred in or about the care, protection,recovery, sale, mortgage, leasing, disposal and management of the estateof the person,

5. the preservation and improvement of the estate of the person,6. the taking up of rights to issues of new shares, or options for new shares,

to which the person may become entitled by virtue of any shareholdings,and

56 Ibid. ss 47(2) and 48(4).57 Ibid. s 57(1).58 Ibid. s 56.59 Ibid. s 56(2).60 Ibid. s 58.

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7. the maintenance (including future maintenance), clothing, medicine andcare, past and present, of the person.61

Without restricting any of her other functions, the NSW Trustee may exercisethe following functions relating to the property of a person when managing thatperson’s estate:

1. receive money, rent, income and profit of real and personal property,2. grant leases of property for a term not exceeding 10 years and give to a

lessee an option of renewal if the aggregate duration of the lease and anysuch renewal does not exceed 10 years,

3. enter into a share-farming agreement for a period not exceeding 3 years,4. surrender a lease and accept a new lease,5. accept a surrender of a lease and grant a new lease,6. execute a power of leasing vested in a person having a limited estate

only in the property over which the power extends,7. buy, sell, realise and mortgage or charge (with or without a power of

sale) real and personal property62,8. pay interest secured by a mortgage or charge out of capital, if income is

insufficient,9. postpone the sale, calling in and conversion of any property that the

NSW Trustee has a duty to sell, other than property that is of a wasting,speculative or reversionary nature,

10. settle, adjust and compromise a demand made by or against the estate,11. exchange or join in a partition of property and give or receive money for

equality of exchange or partition,12. carry on a business, so far as may appear desirable for the purpose of

more advantageously disposing of, or winding up, the business orpreserving the business of a managed person until the managed person isable to carry it on,

13. agree to an alteration of the conditions of a partnership into which amanaged person has entered, for the purpose of more advantageouslydisposing of an interest in the partnership or terminating liability,

14. carry out a contract entered into before the appointment of the NSWTrustee or enter into an agreement terminating the liability,

15. surrender, assign or otherwise dispose of, with or without consideration,onerous property,

16. exercise a power, or give a consent required for the exercise of a power,where the power is vested in a managed person for the benefit of theperson or the power of consent is in the nature of a beneficial interest inthe person,

17. sequestrate the estate under the bankruptcy laws,

61 Ibid. s 59.62 Ibid. s 3(1).

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18. take proceedings to cause a company to be placed in liquidation andvote or act by proxy at meetings of creditors or shareholders, whetherthe company is in liquidation or not,

19. bring and defend actions, suits and other proceedings,20. without limiting paragraph 19, take criminal proceedings touching or

concerning property,21. pay rates, taxes, assessments, insurance premiums, debts, obligations,

costs and expenses and other outgoings,22. without limiting paragraph 21, pay the reasonable costs of the erection

of a memorial or a tombstone over the grave of a deceased person or, ifa deceased person is cremated, the reasonable costs of a memorial orany arrangements for the preservation of the ashes of the deceasedperson,

23. repair and insure against fire or accident any property, and24. bring land under the Real Property Act 1900 (NSW).63

8. 3. 10. The supervisory role of the Supreme Court in the management ofestatesEven though the evolutionary separation of the Supreme Court from themanagement of estates placed under management by itself, the GuardianshipTribunal or the Mental Health Review Tribunal continues, the Court stillretains a supervisory role which it may exercise from time to time.64 Inparticular, the Court may give the NSW Trustee directions about how sheshould exercise her functions in relation to an estate she is managing under afinancial management order. While the NSW Trustee may apply for suchdirections from time to time in difficult matters, the person whose estate isunder management or a relative, friend or debtor of that person may also applyto the Court. Also the Court may let any other person it considers has sufficientinterest in the matter apply for such directions.65

Nevertheless, private managers, whether appointed by the Supreme Court orthe Guardianship Tribunal, except in exceptional circumstances, receive theirdetailed authorities to act in orders from the NSW Trustee to whom they haveto account annually.

8. 3. 11. The orders the NSW Trustee may give to private financial managersThe NSW Trustee gives orders to private financial managers as to theadministration and management of the estates they have been made responsiblefor by either the Guardianship Tribunal or the Supreme Court. Those orderscover the authorities and directions that the NSW Trustee gives to privatefinancial managers, but may also cover enforcing the exercise of theirfunctions.66

63 Ibid. s16.64 Ibid. ss 61, 64 and 65.65 Ibid. s 61.66 Ibid. s 64.

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The NSW Trustee may make both general and particular orders. She may makethe orders that appear necessary:

1. for the payment of the debts and engagements of, or otherwise for thebenefit of the person whose affairs a private financial manager ismanaging,

2. for the maintenance and benefit of the family of that person, or

3. otherwise as the Public Trustee thinks necessary or desirable for the careand management of the estate of the incapable person.67

The NSW Trustee may also make particular orders for particular purposes. Shemay make orders relating to the mortgaging or otherwise charging of the realproperty or the sale, charging or otherwise dealing with or disposing of, in themost expedient way, the real and personal property of a person whose affairsare managed by a private financial manager for the purpose of achieving one ormore of the following outcomes:

1. payment of the person’s debts or engagements,

2. discharge of any encumbrance on property of the person,

3. payment of any debt or expenditure incurred for the maintenance(including future maintenance), or otherwise for the benefit, of theperson,

4. payment of the costs of any proceeding under this Act or of any sale orother disposition made under this Act, and

5. payment of such other sum or sums to such person or persons as theNSW Trustee thinks fit.68

In addition the NSW Trustee may make orders authorising or directing theapplication of money that may comprise either the whole or a part of an estateunder private management for any of the following purposes:

1. the preservation and improvement of the person’s estate,

2. the taking up of rights to issues of new shares, or options for new shares,to which the person may become entitled by virtue of any shareholdings,and

3. the investment of money not required for the time being for any of theother purposes specified in 1 and 2 in such manner as the NSW Trusteethinks fit.69

67 Ibid. s 65(1).68 Ibid. s 65(2)69 Ibid. s 65(3).

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Further, the NSW Trustee may make orders authorising and directing privatefinancial managers as follows:

1. to exercise some or all of the functions as to property that the NSWTrustee may exercise and which are set out above,

2. a manager to have all, or any specified, functions necessary andincidental to the management and care of an estate,

3. to have and exercise such other functions as the NSW Trustee maydirect.

The NSW Trustee may also give a manager such directions relating to theorders set out in 1, 2 and 3 as she thinks fit.70

These 2009 provisions continue the practice developed in New South Walesthat where the Guardianship Tribunal or the Supreme Court appoints a privateperson as financial manager for an incapable person, but, unlike in some otherStates and Territories, it is the NSW Trustee, rather than the Tribunal or Courtmaking the appointment, that gives the financial manager their functions.Indeed, the Guardianship Act 1987 (NSW) specifically states that the making ofa financial management order by the Guardianship Tribunal does not authorisethe person appointed as manager to interfere in any way with the estateconcerned until the NSW Trustee has given the manager an order setting outthe functions that manager may exercise.71 While this is the normal procedure,it is possible for the Supreme Court, on request, to give directions relevant tothe management of the estate.72

Also since 2009, the Guardianship Tribunal has been able to include in itsfinancial management orders appointing the NSW Trustee as financialmanager, functions for the NSW Trustee to exercise as manager.73 Orders madeby the NSW Trustee in relation to private financial managers are subject to anyrelevant order the Guardianship Tribunal may have made.74 However, theGuardianship Tribunal may make such orders only when the person thefinancial management order is about is also under guardianship.

Nevertheless, the person appointed as manager may take such action as may benecessary for the protection of the estate (including action specified by theGuardianship Tribunal) pending the NSW Trustee’s orders (or directions of theCourt).75

70 Ibid. s 66.71 Guardianship Act 1987 (NSW) s 25M(2).72 Ibid. s 25M(2)(a).73 NSW Trustee and Guardian Act 2009 (NSW) s 56(b).74 Ibid. ss 64(4), 65(4) and 66(3).75 Guardianship Act 1987 (NSW) s 25M(3).

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Private financial managers provide the accounts of the estates they aremanaging to the NSW Trustee and answer to the NSW Trustee in relation totheir management of an estate.

8. 3. 12. Effect of a financial management orderThe effect of a financial management order made by the GuardianshipTribunal, the Supreme Court of the Mental Health Review Tribunal is that thepower of a person whose financial affairs are placed under management (amanaged person) to deal with their estate is suspended in relation to so much ofthat estate as is placed under management of another person or committed tothe management of the NSW Trustee.76

Nevertheless, the private financial manager or the NSW Trustee whenappointed to manage the person’s estate may give a written authorisation to theperson whose affairs are under management to deal with so much of their estateas the manager considers appropriate and specifies in the written authority.77

This authorisation may be given at any time and, similarly, may be withdrawn,wholly or in part, at any time.78 However, if the authorisation is to be given ortaken away by a private financial manager, it cannot be given or withdrawnwithout the approval of the NSW Trustee.79

This statutory provision reflects the decision of the majority in the New SouthWales Court of Appeal case David by her Tutor the Protective Commissioner vDavid that the effect of a decision by the Guardianship Tribunal to make afinancial management order was to suspend, during the currency of the order,the right of the person the order was about to deal with their property as well asto give effect to the issues raised by the dissenting judge, Kirby P, aboutretention of rights and a least restrictive alternative approach.80 The decision inthe David Case applies also to an order of this kind made by the SupremeCourt if it were to exercise its residual parens patriae jurisdiction.

8. 3. 13. Reviews of financial management orders8. 3. 13. 1. Requested and “own motion” reviewsWho may request a review?The Guardianship Tribunal may conduct two kinds of review. These are:

1. a review of the whole order, and2. a review of the appointment of the manager.81

In relation to the first, broad review of an order, this may be initiated in anumber of ways:

76 NSW Trustee and Guardian Act 2009 (NSW) s 71(1).77 Ibid. s 71(2).78 Ibid. s 71(3).79 Ibid. s 71(5).80 (1993) 30 NSWLR 417, 433, 437-439 and Kirby P 430-432.81 Guardianship Act 1987 (NSW) ss 25N and 25S.

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1. the Tribunal may order that a financial management order be reviewedwithin a specified time in which case, the Tribunal must begin thereview within the time specified in the order,82

2. in any financial management that is either confirmed or varied as aresult of a review, the Tribunal may order that that order be reviewedwithin a specified time in which case the requirements set out in 1apply,83

3. by the Tribunal, at any time on its own motion,84 and

4. on an application for revocation or variation of an order.85

A review of the appointment of the manager may be initiated by:

1. the Tribunal on its own motion,

2. a request from the NSW Trustee, or

3. a request from any other person who, in the opinion of the Tribunal, hasa genuine concern for the welfare of the person.86

While the legislation does not empower the person the order was about torequest this kind of review, the Tribunal would be likely to initiate the reviewof its own motion if such a person was seeking a review, unless the Tribunalconsidered that the review would be futile in that there would be no chance thatit would result in it changing the manager or changing the order in any of theways open to the Tribunal on such a review.

Supreme CourtThe Supreme Court does not review the financial management orders it makes,but it may, on application by the person the order is about, revoke its order. 87

However, it should be noted that Porter and Robinson suggest that once mademanagement orders remain in place until the death of the person the order isabout unless the Court orders that the person has become capable of managingtheir estate.88 Nevertheless, the Court has the inherent power to replace amanager it has appointed if to do so was in the best interests of the personwhose affairs were under management.89 These matters are dealt with below at8. 3. 13. 2 and 8. 3. 13. 3.

A form of “own motion” review by the NSW TrusteeWhen the Guardianship Tribunal was initially established, it could not make a

82 Ibid. s 25N(1) and (3).83 Ibid. s 25N(2).84 Ibid. s 25N(4)(a).85 Ibid. ss 25N(4)(b) and s 25R.86 Ibid. s 25R.87 NSW Trustee and Guardian Act 2009 (NSW) s 86.88 Porter and Robinson op cit (footnote 13), 57-58.89 Interpretation Act 1987 (NSW) s 47.

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financial management order in relation to a person’s estate unless it also hadbefore it an application to make a guardianship order in relation to that person.A vestige of that time remains in the legislation so that where a person has beenthe subject of a guardianship order and a financial management ordercommitting the estate of the person to the NSW Trustee and the guardianshiporder is revoked or lapses, the NSW Trustee has a discretion to continue tomanage the property and affairs of that person until either the financialmanagement order is revoked, or the NSW Trustee is satisfied that the person iscapable of managing their own affairs.90 In practice, when the GuardianshipTribunal is reviewing the guardianship order in relation to a person whoseestate is being managed by the NSW Trustee, the NSW Trustee asks theTribunal, should it revoke the guardianship order, to express its views onwhether the financial management order should continue or not. The NSWTrustee usually acts on that advice, after considering it.

Also, even if the NSW Trustee is not satisfied that the person is capable ofmanaging their affairs, she must nevertheless do all things that are reasonablypracticable to inform the person that they may apply to the GuardianshipTribunal to revoke the financial management order in relation to them. TheNSW Trustee is under the same obligation to a person who has ceased to be apatient in a mental health facility to advise them that they can make the sameapplication to the Mental Health Review Tribunal if it made the financialmanagement order in relation to them.91

8. 3. 13. 2. Parties to reviews of financial management ordersGuardianship TribunalThe following are parties to reviews by the Guardianship Tribunal of financialmanagement orders or the appointment of a manager of an estate:

1. the person who requested the review,

2. the person the order is about,

3. the spouse of that person, if the relationship between them is close andcontinuing,

4. the person, if any, who has care of the person the order is about,

5. the manager of the estate,

6. the NSW Trustee, and any person whom the Tribunal has joined as aparty to the review.92

Supreme CourtOnly the person the order is about may make an application to the SupremeCourt under the NSW Trustee and Guardian Act 2009 (NSW) for the order to be

90 Ibid. s 90.91 Ibid. s 90(2).92 Guardianship Act 1987 (NSW) ss 3F(6) and (7) (parties and 57A (Tribunal joining parties).

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revoked.93 Applications to change managers can be made by the person orothers.94

8. 3. 13. 3. Powers of the Tribunal to review orders and the Court to deal withapplications to revoke ordersGuardianship TribunalThe Tribunal has, in effect, the same powers whether it is dealing with what is,from the beginning a review of the whole financial management order or areview of the appointment of the manager. However, it may review only thoseorders that it has made.

After a review of the whole order, the Tribunal has three options; it must vary,revoke or confirm the order. However, it may revoke the financial managementorder only if it:

1. is satisfied that the person the order is about is capable of managingtheir affairs,95 or

2. considers that it is in the best interests of the person the order is aboutthat the order be revoked (even though the Tribunal is not satisfied thatthe person is capable of managing their affairs).96

In addition, when reviewing its appointment of a manager, the Tribunal mayalso review the financial management order under which the manager wasappointed, and may take any of the actions set out in the last paragraph.97

If the Tribunal limits its review to reviewing its appointment of the manager,then, after the review, the Tribunal may revoke or confirm that appointment.However, it may revoke the appointment under review only if:

1. the manager themselves seeks the revocation, and

2. the Tribunal is satisfied that it is in the best interests of the person theorder is about that the appointment be revoked.98

Those who seek to have the manager changed do not have to prove that themanager acted incompetently, improperly or unlawfully. They must show somereason why the manager should be replaced. The Tribunal has a broaddiscretion as to whether or not to replace the manager, but must be satisfiedthat it is in the best interests of the person whose estate is under management

93 NSW Trustee and Guardian Act 2009 (NSW) s 86(1).94 See Holt v Protective Commissioner (1993) 31 NSWLR 227 (siblings of the person); MB vProtective Commissioner (2000 ) 50 NSWLR 24 (mother and primary carer of the person) andApplication of J and K [2009] NSWSC 1453 (father and sister).95 For a case in which two members were satisfied that the person was now capable of managing theiraffairs and one member was not see, Matter no. 2000/5600 (unreported NSW Guardianship Tribunal,15 May 2001).96 Ibid. s 25P97 Ibid. s 25U(2).98 Ibid. s 25U(4).

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that the manager should be replaced before doing so. However, once sosatisfied, it is “duty bound” to replace the manger.99

If the outcome of the review is that the financial management order is revoked,then the appointment of the manger also comes to an end. However, if theoutcome of the review is that the appointment of the manager is revoked, theTribunal is required to appoint another person as manager of the estate undermanagement to replace the manager whose appointment has been revoked.100

The person whose appointment as the manager of an estate is revoked must payover or hand over the estate to the new manager.101

In a 2002 case, the Tribunal reviewed the appointment of two daughters of awoman with dementia, revoked their appointment and appointed the thenProtective Commissioner (since replaced by the NSW Trustee) to manage theirmother’s estate. They had failed to provide for their mother’s needs and hadmade gifts of $10,000 dollars each to themselves. Their view was that theywere beneficiaries of their mother’s estate and she had no use for the money inher estate.102

For a case in which the Tribunal reviewed a financial management order on thebasis of evidence that the person the subject of the order was capable ofmanaging her affairs see, NCS [2009] NSWGT 7.

Supreme CourtWhen dealing with an application to revoke a financial management order, ifthe Court is satisfied that the person the order is about is capable of managingtheir affairs, it may:

1. revoke any declaration made that the person is incapable of managingtheir affairs,

2. revoke the order that the estate of the person be subject to management,and

3. make such orders as appear to it necessary to give effect to therevocation of the order, including the release of the estate of the personfrom the control of the Court, the NSW Trustee or a manager and thedischarge of any manager.103

As already noted at 8. 3. 13. 1 above, because the Supreme Court has the powerto appoint a manager, it also has the power to remove and replace a manager.104

99 Holt v Protective Commissioner (1993) 31 NSWLR 227 and KW v Protective Commissioner [2008]NSWADTAP 5.100 Ibid. s 25U(3). For an example of the Tribunal dealing with an application to replace a manager see,Matter no 95/1860 (unreported, NSW Guardianship Board, 27 September 1995).101 Ibid. s 25Q(2).102 Matter no 2001/6182 (unreported, NSW Guardianship Tribunal, 27 May 2002).103 NSW Trustee and Guardian Act 2009 (NSW) s 86(1).104 Interpretation Act 1987 (NSW) s 47 and Holt v Protective Commissioner (1993) 31 NSWLR 227,237.

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Its discretion, and that of the Guardianship Tribunal, to appoint and remove afinancial manager is a broad one, but Kirby P has provided a checklist ofconsiderations to be borne in mind when exercising the discretion as to who toappoint as manager or whether to revoke the appointment of a manager andappoint another person as manager. He also noted that the “abiding rule” wasthe achievement of the best interests of the person the hearing was about.105 Asummary of the checklist is set out below.106

8. 3. 14. Dealing with the estate after revocation of the financial managementorderIf the Guardianship Tribunal revokes a financial management order (or varies itso as to exclude from the order a specified part of the estate previously subjectto it), the person appointed as manager of the estate is to pay over or hand overthe estate (or the relevant part of it):

1. to the owner of the estate, or

2. to a person designated by the Tribunal to receive the estate on behalf ofthe owner.

A person who pays over or hands over any part of an estate as a result ofdecisions made by the Tribunal does not incur any liability for doing so. Also,the paying over or handing over of any part of an estate not operate to changethe ownership of the estate.107 However, it would create a form of constructivetrust with the person receiving the estate being the trustee and the owner of theestate being the beneficiary.

The Guardianship Tribunal has to be very careful when designating who is toreceive the estate. If the financial management order is revoked because theperson the order was about has regained capacity to manage their own affairs,the Tribunal should designate them as the recipients of their own estate. TheTribunal would have to have very good reasons for designating a person otherthan the owner of the estate to receive the estate if its owner had capacity.

The question of who to designate to receive the estate becomes more difficultfor the Tribunal if it revokes the financial management order on the ground thatit is in the best interests of the person the order is about to do so even thoughthe Tribunal is not satisfied that the person is capable of managing their affairs.It may be able to designate an attorney under an enduring power of attorneythat may have been revived by the revocation of the order. Alternatively, it maybe able to designate someone else who has demonstrated to the Tribunal thatthey have a relationship with the owner of the estate and have a set ofarrangements in place that will protect the estate of the still incapable person.An example would be a spouse or other long term life partner who had a longestablished joint bank account with the person.

105 Ibid. 241.106 See 8. 11. 13.107 Ibid. s 25Q(3) and (4).

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8. 4. Queensland8. 4. 1. Who has jurisdiction to appoint administrators?As noted in Chapter 10, in Queensland the Queensland Civil andAdministrative Tribunal (QCAT) has exclusive jurisdiction to appointadministrators for “adults with impaired capacity for (financial) matters”.108

While the Guardianship and Administration Act 2000 (Qld) specifically statesthat its provisions do not affect the Supreme Court of Queensland’s inherentjurisdiction, including its parens patriae jurisdiction, that general provisiondoes not prevail over the specific provision in the same Act giving exclusivejurisdiction to appoint guardians to QCAT.109 Nevertheless, the Supreme Courtretains its specific jurisdiction under the Public Trustee Act 1978 (Qld) to makeprotection orders appointing the Public Trustee to manage all or those parts ofthe estate of a person under the age of 18 years as the Court directs.110

Also, the Court may transfer proceedings before it that are within QCAT’sjurisdiction to QCAT. Also, the Court has acknowledged that QCAT is aspecialist tribunal set up to determine issues relating to intellectually disabledadults.111

8. 4. 2. Who may apply for an administration order?8. 4. 3. Who may take part in the hearing as a party?These matters are the same as for an application for the appointment of aguardian.112 The application must also include the proposed administrator’swritten agreement to being appointed.113 Also, unless QCAT orders otherwise,a person who agrees to be appointed as administrator must give amanagement plan to QCAT, or its appropriately qualified nominee, forapproval.114

8. 4. 4. What has to be proved before an order can be made?

108 Guardianship and Administration Act 2000 (Qld) s 84(1).109 Ibid. s 240.110 Public Trustee Act 1978 (Qld), s 65 which provides that on the application of the Public Trustee, theSupreme Court may make a protection order appointing the Public Trustee to take possession of,control and manage all or part of the estate of a person who is under 18 years and who the Court issatisfied is:

1. by reason of age, disease, illness, or physical or mental infirmity or of their taking or using inexcess alcoholic liquors, or any intoxicating, stimulating, narcotic, sedative or other drug,

2. either continuously or intermittently,3. unable, wholly or partially, to manage their affairs; or subject to, or liable to be subjected to,

undue influence in respect of the their estate or part of it, or4. is otherwise in a position which in the opinion of the Court renders it necessary in the interest

of that person or of those dependent upon the person that the person’s property should beprotected.

111 Re Langham [2005] QSC 127 [28].112 See Ch 6. 7. 2 and 6. 7. 3.113 Guardianship and Administration Act 2000 (Qld) s 117.114 Ibid. s 20.

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The same matters have to be proved for the appointment of an administrator asfor the appointment of a guardian.115 In particular, before QCAT may, bymaking an administration order, appoint an administrator for the person thehearing is about, it must be satisfied that:

1. the person the application is about has impaired capacity for the(financial) matter,

2. there is a need for a decision in relation to that matter or the person islikely to do something in relation to the matter that involves, or is likelyto involve, unreasonable risk to their health, welfare or property, and

3. without the appointment of an administrator;(a) the person’s needs will not be adequately met, or(b) the person’s interests will not be adequately protected.116

A person has impaired capacity for a (financial) matter if they are incapable of:

1. understanding the nature and effect of decisions about the matter,2. freely and voluntarily making decisions about the matter and3. communicating the decisions in some way.117

A financial matter for an adult, is defined in the Act as, a matter relating to theadult’s financial or property matters. It includes a matter relating to one ormore of the following:

1. paying maintenance and accommodation expenses for the adult and theadult’s dependants, including, for example, purchasing an interest in, ormaking another contribution to, an establishment that will maintain oraccommodate the adult or a dependant of the adult,

2. paying the adult’s debts, including any fees and expenses to which anadministrator is entitled under a document made by the adult or under alaw,

3. receiving and recovering money payable to the adult,4. carrying on a trade or business of the adult,5. performing contracts entered into by the adult discharging a mortgage

over the adult’s property,6. paying rates, taxes, insurance premiums or other outgoings for the

adult’s property,7. insuring the adult or the adult’s property,8. otherwise preserving or improving the adult’s estate,9. investing for the adult in authorised investments,10. continuing investments of the adult, including taking up rights to issues

of new shares, or options for new shares, to which the adult becomesentitled by the adult’s existing shareholding,

115 Ibid. s 12. See also, Ch 6. 7. 4.116 Ibid. s 12(1).117 Ibid. Schedule 4.

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11. undertaking a real estate transaction for the adult,12. dealing with land for the adult under the Land Act 1994 (Qld) or Land

Title Act 1994 (Qld),13. undertaking a transaction for the adult involving the use of the adult’s

property as security (for example, for a loan or by way of a guarantee)for an obligation the performance of which is beneficial to the adult, alegal matter relating to the adult’s financial or property matters, and

14. withdrawing money from, or depositing money into, the adult’s accountwith a financial institution.118

8. 4. 5. Appointing an administratorThe matters the Tribunal must be satisfied about before it may appoint a personas an administrator are essentially those it must be satisfied about before it mayappoint a person a guardian. These are set out in Chapter 6. 7. 5. In addition,the proposed administrator must not be a bankrupt or be taking advantage ofthe laws of bankruptcy as a debtor under the Bankruptcy Act 1966 (Cth) or asimilar law of a foreign jurisdiction.119

The Tribunal may appoint the Public Trustee or a trustee company under theTrustee Companies Act 1968 (Qld) as the administrator of an impaired adult.120

8. 4. 6. Joint, several, alternate and successive administratorsIn relation to these matters, the same provisions apply as apply to guardians.These are set out in Chapter 6. 7. 6. In addition, the appointment of anadministrator ends automatically if the administrator becomes bankrupt orinsolvent.121

8. 4. 7. Queensland administration ordersThe Guardianship and Administration Act 2000 (Qld) empowers administratorsto exercise power in relation to all the financial matters of the adult withimpaired capacity they have been appointed administrator for or in relation tothose financial matters of that adult set out in the order appointing them.Administrators may do anything in relation to the financial matters that theincapable adult would have been able to do if they had had capacity.122 In thissense administration orders made by QCAT may be either plenary, covering allof the estate of the adult with impaired capacity, or limited in the sense ofcovering only those financial matters specifically referred to in the

118 Ibid. Sch 2.119

Guardianship and Administration Act 2000 (Qld) s 14(1)(b)(i). If the proposed administrator hasbeen a bankrupt or has taken advantage of the laws of bankruptcy as a debtor under the Bankruptcy Act1966 (Cth) or a similar law of a foreign jurisdiction, then the Tribunal must have regard to the mattersset out in s 15(4)(c) in considering the competence of that person for appointment and theappropriateness of appointing them. For an example of a case in which it was necessary to appoint thePublic Trustee as administrator and not a family member see, Re TAO [2003] QGAAT 23.120 Ibid. s 14(1)(b)(ii). For a case showing the criteria the Tribunal used to choose between the PublicTrustee and a trustee company as administrator see, Re HAS [2001] QGAAT 3.121 Guardianship and Administration Act 2000 (Qld) s 26(2).122 Ibid. s 33.

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administration order. In this way part of the person’s estate may not be coveredin the administration order leaving that part of the estate in their hands to bemanaged either by them or informally by others on their behalf.

8. 4. 7. 1. Interim ordersIf QCAT is satisfied that urgent action is required because of a serious risk tothe financial affairs of an adult with impaired capacity, it may make an interimorder appointing an administrator, for a maximum period of six months,without having to conduct a full hearing, provide notice of the hearing, orotherwise comply with the requirements of the Guardianship andAdministration Act 2000 (Qld).123 The procedure for dealing with applicationsfor interim orders is set out in a Presidential Direction.124

8. 4. 8. Powers and functions of an administratorAs already noted, Queensland administrators may do anything in relation to thefinancial matters they have been appointed to administer that the incapableadult would have been able to do if they had had capacity.125 Some of thepowers and functions of administrators are set out in the Guardianship andAdministration Act 2000 (Qld).126 Those powers and functions and the commonlaw powers and functions of administrators are dealt with later in this chapter at8. 11. 14.

Administrators of estates valued at less than $50,000, excluding the principalplace of residence or aged care facility bond of the person whose financialmatters are being administered, account directly to QCAT. If the estate isvalued at $50,000 or more, with the same exclusions, the administrator mustsubmit the accounts of the estate they are administering to one of a panel ofexaminers approved by QCAT.

8. 4. 9. Reviews of administration ordersQCAT must conduct a review its appointment of an administrator at least everyfive years.127 In addition to these periodic reviews, QCAT may also review itsappointment of an administrator on its own initiative (own initiative reviews)or on the application of certain persons (requested reviews).128 The provisionsin relation to reviews of administration orders in Queensland, including theparties to such reviews and the powers of QCAT when conducting suchreviews, are the same as those for the reviews of guardianship orders. These areset out in Chapter 6. 7. 11.

It should be recalled that, having conducted its review, QCAT must revoke theadministration order unless it is satisfied it would have made an appointment if

123 Ibid. s 129.124 Presidential Direction No 2 of 2005.125 Guardianship and Administration Act 2000 (Qld) s 33.126 Ibid. ss 33 – 41, 44-47 and 49-55.127 Ibid. s 28.128 Ibid. ss 28 and 29.

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it had been dealing with a new application for an appointment of anadministrator.129 The Tribunal may replace administrators after conducting areview.130

8. 5. South Australia8. 5. 1. Who has jurisdiction to appoint administrators?In South Australia, both the Supreme Court and the District Court may makeprotection orders and the Guardianship Board may make administration orders.The Supreme and District Courts may make protection orders under the Agedand Infirm Persons’ Property Act 1940 (SA).131 The Supreme Court may retainits parens patriae jurisdiction to appoint administrators for the estates ofincapable people and the District Court may also have the same parens patriaejurisdiction.132 Nevertheless, the Aged and Infirm Persons’ Property Act 1940(SA) appears to give the Guardianship Board precedence over the two courts inrelation to the making of administration orders.133

Consequently, for the reasons set out in Chapter 6. 6. 1., the wise course is tomake applications for administration orders to the Guardianship Board of SouthAustralia rather than to the Supreme or District Court, unless the court hasawarded damages to a person who has a physical or mental infirmity whichrenders them unable to manage their financial affairs. The role of the twocourts in making protection orders will be returned to below at 8. 5. 8.

In summary, the Guardianship Board and the Supreme and District Courts havejurisdictions, arising from different sources, to make administration orders:

1. Guardianship Board, under the Guardianship and Administration Act1993 (SA),

2. Supreme Court, under the Aged and Infirm Persons’ Property Act 1940(SA),

3. Supreme Court, under the parens patriae element of its inherentjurisdiction,

4. District Court, under the Aged and Infirm Persons’ Property Act 1940(SA).

8. 5. 2. Who may apply for an administrator order?Those who may make an application to the Guardianship Board for aguardianship order or for the variation or revocation of such an order may alsomake applications for administration orders.134 This matter is dealt with at 6. 6.2.

129 Ibid. s 31(2). For an example see, Re GI [2004] QGAAT 11[8].130 For some examples see, Re MME [2006] QGAAT 84 and Re MDC [2004] QGAAT 5.131 For an example see, Adam v Hardy [2007] SASC 277.132 District Court Act 1991 (SA) s 8.133 Aged and Infirm Persons’ Property Act 1940 (SA) s 30.134 Guardianship and Administration Act 1993 (SA) ss 36 and 37. See, Ch 8. 6. 2.

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8. 5. 3. Who may take part in the hearing as a party?This matter is dealt with in Chapter 6. 6. 3. Those who may attend the hearingof an application for a guardianship order for a particular person may alsoattend the hearing of an application for an administration order for the sameperson. It is common for applications for both orders to be heard together.

8. 5. 4. What has to be proved before an order can be made?Before the Board may make an administration order it must be satisfied by theevidence before it that the person the subject of the application:

1. has a mental incapacity, and2. should have an administration order made in relation to them.135

The term “mental incapacity” and the considerations that the GuardianshipBoard has to take into account before it can make an administration order areset out in Chapter 6. 6. 4 as they are the same as those that the Board has totake into account before it may make a guardianship order.136

8. 5. 5. Appointing an administratorThe Guardianship Board may appoint any of the following as an administrator:

1. the Public Trustee,2. a trustee company under the Trustee Companies Act 1988 (SA), or3. any natural person who the Board considers suitable to act as

administrator of the estate of the person the hearing is about.

The Board cannot appoint anyone as an administrator unless they consent to theappointment. However the Public Trustee’s consent is not required before theBoard appoints her.137 It is suggested that the Public Trustee cannot refuse toaccept an appointment as administrator by the Board.

When determining the suitability of a person for appointment as a privateadministrator, the Board must have regard to:

1. whether the potential appointee and the person with the mentalincapacity would be incompatible,

2. whether there is some existing family arrangement or relationship thatshould be preserved or should not be disturbed,

3. whether the potential appointee would be competent to discharge thefunctions of an administrator and would do so in accordance with the

135 Ibid. s 35(1).136 Guardianship and Administration Act 1993 (SA) ss 3 and 5. For an example of a case in which theBoard failed to take into account at least some of the s 5 principles see, Williams v Guardianship Board[1999] SADC 25.137 Ibid. s 51.

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principles set out in the Guardianship and Administration Act 1993(SA),138

4. whether the potential appointee would be readily available fordischarging those functions,

5. whether any conflict of interest would arise from the appointment. (Thefact that a proposed appointee is related to the person with the mentalincapacity by blood or marriage is not, of itself, to be taken as givingrise to a conflict of interest), and

6. such other matters as the Board considers relevant.139

8. 5. 6. Joint, several and alternate administratorsWhile the Public Trustee may only be appointed as a sole administrator, theGuardianship Board may appoint more than one private administrator toadminister the estate of a mentally incapacitated person. If that is done, theadministrators are joint administrators who must concur with one another inevery act done and decision made in relation to the person the order is about.140

While it is possible for the Board to appoint administrators with separatefunctions and thus as “several” administrators, it would not be very practical todo so and would make it difficult for the administrators to consult amongthemselves and with the person the order is about and act in that person’s bestinterests.

8. 5. 7. Types of administration orders8. 5. 7. 1. Limited and full administration ordersThe Guardianship Board may appoint an administrator for only a specified partof a mentally incapable person's estate - a limited administration order – unlessit is satisfied that such an order would not be appropriate, in which case it canmake a full administration order applying to the whole of the person's estate.141

8. 5. 7. 2. Self-revoking ordersThe Board has power to include limitations in any administration order itmakes, including a limitation as to the duration of the order. Consequently, itmay make administration orders that are to last only for a set period (of lessthan three years). Such orders would not have to be reviewed at the“circumstances reviews” discussed at 8. 5. 11. 1 below.142 Self-revoking ordersmay be made for both limited and full administration orders.

8. 5. 7. 3. Urgent ordersIf it is satisfied that urgent action is required, the Board may make an urgentadministration order for up to 21 days where such an order is necessary to stop

138 See ibid. s 5.139 Ibid. s 50.140 Ibid. s 52.141 Ibid. s 35(1)(c) and (d).142 Ibid. ss 35(4)(a) and 57.

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transactions such as withdrawals from bank accounts or the transfer of the titleto real estate taking place.143 There must be grounds for believing that theperson lacks mental incapacity but that more evidence has to be gathered todemonstrate whether or not the person the hearing about has a mentalincapacity.

8. 5. 8. Powers of the Supreme and District Courts to make protection ordersBoth the Supreme Court and the District Court may make a protection orderapplying to all or part of the estate of a person who, they are satisfied, becauseof age, disease, illness, or physical or mental infirmity, is:

1. unable, wholly or partially, to manage their affairs,2. being subjected to or liable to be subjected to, undue influence in

relation to their estate or the disposition of it, or3. otherwise in a position which the court considers it necessary in the

interest of that person or of those dependent upon them that theirproperty should be protected.144

These criteria are consistent with those that courts and tribunals elsewhere inAustralia have to be satisfied about before they may make an administrationorder, but the two South Australian courts have a broad discretion to makeadministration orders where they are satisfied that a person is wholly orpartially unable to manage their affairs because:

1. the person takes alcohol to excess or uses any intoxicating, stimulating,narcotic, or sedative drug to excess, and

2. this renders them, either continuously or occasionally, wholly orpartially unable to manage their affairs.145

The courts may do this notwithstanding anything to the contrary in any otherAct.146

8. 5. 8. 1. Who may apply for a protection order?The following may apply for a protection order in either the Supreme orDistrict Court:

1. the person whose property is sought to be protected,2. the person they are married to or their domestic partner,147

3. any near relation by blood or marriage of the person,148

4. the Public Trustee, or

143 Ibid. s 14(7).144 Aged and Infirm Persons’ Property Act 1940 (SA) s 7(1).145 Ibid s 7(2).146 Ibid.147 Ibid. s 3(1).148 The terms “near relation” and “blood relation” are not defined in the Act nor in the ActsInterpretation Act 1915 (SA)..

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5. any other person who, through evidence, satisfies the court thatcircumstances exist which make it proper that they should make theapplication.149

When dealing with an action for damages for personal injury, both the Supremeor District Courts may, either on their own motion or on application, but beforeassessing the amount of the damages, make a protection order relating to all orpart of the estate of the person the action for damages is about if it appears tothe court that, as a result of that injury, the person suffers or is likely to sufferfrom some physical or mental infirmity which renders them:

1. unable, wholly or partially, to manage their affairs, or2. actually or likely to be subject to undue influence concerning their estate

or the disposition of it.150

The courts may also make a protection order it they consider it is otherwisenecessary in the interests of the person or their dependents that their propertyshould be protected under the Aged and Infirm Persons’ Property Act 1940(SA).151 This provision, inserted in the Act in 1973, reflects more paternalisticphilosophy than is reflected in the principles of the Guardianship andAdministration Act 1993 (SA).152

8. 5. 8. 2. Who may be appointed manager under a protection order?The courts may, in a protection order, appoint any of the following as eithersole or joint manager:

1. the person’s spouse or domestic partner,2. the person’s near relation by blood or marriage,3. some other person, or4. any incorporated body (usually a trustee company).153

The courts may appoint the Public Trustee but alone, not jointly.154 Thecommon law preference for appointing a family member appears to have beendisplaced by the terms of the Aged and Infirm Persons’ Property Act 1940 (SA)so that in any case the courts have a complete discretion as to whether or notthey appoint the Public Trustee or some other person or body.155

149 Aged and Infirm Persons’ Property Act 1940 (SA) s 8(1).150 Ibid. s 8A(1)(a) and (b).151 Ibid. s 8A(1)(c).152 Guardianship and Administration Act 1993 (SA) s 5.153 Aged and Infirm Persons’ Property Act (SA) s 10(1). Note that where there is more than onemanager they must all concur in every act,matter, and thing done in relation to the protected estate. See s 17.154 Ibid. s 10(1) and (2).155 Ibid. s 10(2).

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The courts may rescind or vary any protection order.156 The powers thatmanagers have, unless the appointing court otherwise orders, are set out in theAct.157

8. 5. 9. Relationship between Aged and Infirm Persons’ Property Act 1940(SA) Guardianship and Administration Act 1993 (SA)If the Guardianship Board has made an administration order in relation to anestate or part of an estate, then neither the Supreme nor District Court maymake a protection order in relation to that estate or part of an estate.Furthermore, if either of those courts has made a protection order in relation toan estate or part of an estate and subsequently the Guardianship Board makesan administration order covering that estate or part of an estate and files itsorder in that court, the protection order is deemed to have been rescinded asfrom the day that the administration order was made.158 In these waysadministration orders made by the Guardianship Board take precedence overprotection orders made by the two courts.

8. 5. 10. Powers and functions of an administratorThe Guardianship and Administration Act 1993 (SA) makes it clear that,although the administrator has the control and management of the estate andhas the duties and obligations of, and is accountable as a trustee in relation to it,the estate does not vest in the administrator.159 The estate remains the propertyof the mentally incapable person.

Administrators have significant powers and duties when appointed by theGuardianship Board; however the Board can limit the extent of these powers inthe orders it makes.160 Nevertheless, the Board may, in its orders, confer furtherpowers on an administrator, beyond those set out in the legislation, if the Boardconsiders these necessary or desirable for the proper administration of theestate of the mentally incapable person. The Board may include in theadministration order such conditions or limitations as it thinks fit, including alimitation as to the duration of the order.161 It is by appointing them that theBoard gives administrators their powers to act in South Australia. Most of thepowers of administrators are found in the Guardianship and Administration Act1993 (SA).162

Private administrators must provide statements of the accounts of the estatesthey are administering to both the Guardianship Board and the Public

156 Ibid. s 11. For an example of an application to rescind an order see, Porker v Porker [2007] SASC217.157 Ibid. ss 13, 14 and 16.158 Ibid. s 30.159 Guardianship and Administration Act 1993 (SA) s 39(1).160 Ibid. s 39(2).161 Ibid. ss 35(4) and 39.162 Ibid. ss 39(2) and 40-42.

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Trustee.163 The Public Trustee must examine those statements of accounts andreport on them to the Board.164 Where the Public Trustee is the administrator,she must provide statements of the accounts of each estate she is administeringas a result of an order by the Board to the Board at intervals decided by theBoard.165

8. 5. 11. Reviews of administration orders8. 5. 11. 1. Automatic reviewsThe Guardianship Board is required to review the “circumstances” of thosewhose financial affairs are under administration at least every three years to seewhether the administration order in relation to them is still appropriate for thosepeople. On completion of the review, the Board must revoke the order unless itis satisfied that there are proper grounds for keeping the order in force.166 If theBoard decides to keep the order in force, it may vary the terms of the order.The Board has a wide discretion as to how it may conduct its reviews. 167

8. 5. 11. 2. Parties to automatic reviews of administration ordersThe Guardianship and Administration Act 1993 (SA) does not set out who arethe parties to a review; however procedural fairness would require that at leastthe person whose estate was under administration, the administrator of theirestate and their guardian (if any) would have to be notified of the review and begiven the opportunity to take part in it.

8. 5. 11. 3. Powers of the Board on automatic reviewWhile the Board is required to review the circumstances of the person ratherthan the administration order, the purpose of the review is to decide whetherthe administration order is still needed. If it is not still needed, it must berevoked so that the person is not under the stigma of having an administrationorder. If the order is still needed, its terms may be varied.

8. 5. 11. 4. Requested reviewsThe website of the Public Advocate notes that the Board will review anadministration order upon request, if there is new information or a change incircumstances to justify such a review.168 The Guardianship andAdministration Act 1993 (SA) provides that “on an application” the Board mayvary or revoke an administration order.169

8. 5. 11. 5. Who may request a review?While the Act does not set out who may request such a review, proceduralfairness would require that the person requesting the review would have to

163 Ibid. s 44(1).164 Ibid. s 44(4).165 Ibid. s 45.166 Ibid. s 57(3). See, for an example, Wescombe v Guardianship Board [1997] SADC 3609.167 Ibid. s 57.168 See, www.opa.sa.gov.au.169 Guardianship and Administration Act 1993 (SA) s 36.

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have, in the opinion of the Board, sufficient interest in the order being varied orrevoked before it would carry out the review.

8. 5. 11. 6. Parties to requested reviews of administration ordersAgain, while the Act does not set out who are the parties to requested reviews,at least the person whose estate was under administration, the administrator oftheir estate and their guardian (if any) would have to be notified of the reviewand be given the opportunity to take part in it.

8. 5. 11. 6. Powers of the Board when dealing with requested reviewsRequested reviews appear to be limited to applications to vary or revoke theorder. The drafting of the relevant section opens up the argument that theseapplications are different in nature from the reviews of its orders that the Boardis required to carry out at intervals of no more than three years. The argumentis that they limit the Board to either dismissing the application or varying orrevoking the administration order and they are not reviews of “thecircumstances” of the person the order is about which require the Board torevoke the order unless it is satisfied that there are proper grounds for the orderremaining in force.170

8. 6. Tasmania8. 6. 1. Who has jurisdiction to appoint financial managers?For the reasons set out in Chapter 6. 5. 1., the wise course is to makeapplications for orders appointing administrators to the Guardianship andAdministration Board of Tasmania rather than to the Supreme Court.

8. 6. 2. Who may apply for a financial management order?Any person may apply to Guardianship and Administration Board for an orderappointing an administration for the estate of a person with a disability who is18 years old or older.171 As to other aspects of this matter, see Chapter 6. 5. 2.

8. 6. 3. Who may take part in the hearing as a party?This matter is dealt with sufficiently in Chapter 6. 5. 3.

8. 6. 4. What has to be proved before an order can be made?Before the Board may make an administration order, it must be satisfied by theevidence that:

1. the person the hearing is about has a disability,2. because of that disability they are unable to make reasonable judgements

about matters relating to all or any part of their estate, and3. they are in need of an administrator for their estate.172

170 Contrast the terms of s 36 with those of s 57.171 Guardianship and Administration Act 1995 (Tas) s 50(1).172 Ibid. s 51(1).

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As to the other matters and considerations the Board has to put its mind to,these are set out in Chapter 6. 5. 4. and 6. 4. 4.

8. 6. 5. Appointing a financial managerWhere Board is satisfied that it is in the best interests of the person the hearingis about to appoint an administrator for their estate, it may appoint asadministrator:

1. the Public Trustee,2. the Public Guardian,3. a trustee company, or4. a private person.173

While none of the Public Trustee, Public Guardian or trustee companies haveto meet any specific criteria, private persons have to be suitable to act as theadministrator and the Board has to be satisfied as to other matters in relation tothem.174 These are set out in Chapter 6. 5. 5. and 6. 4. 5.175

8. 6. 6. Joint/several/alternate administratorsIt is the practice of the Tasmanian Board to appoint only single administrators.Applying the normal rules of statutory interpretation, the Board may be able toappoint joint administrators, provided each of them meets the criteria forappointment as an administrator and they have the same functions as eachother. 176 They would have to make the decisions about the estate jointly. TheBoard does not appoint joint administrators with different functions and doesnot to appoint alternate administrators. The Guardianship and AdministrationAct 1995 (Tas), provides for such appointments in relation to guardians, butdoes not have similar provisions in relation to administrators.177

Also, since there is no provision for dealing with the death of an administrator,the administration order would cease to operate if the administrator died.

8. 6. 7. Types of administration orders8. 6. 7. 1. Limited ordersThe Board may make limited orders which list the type of financial decisionsthat the administrator is authorised by the Board to make.

8. 6. 7. 2. Full ordersThe effect of the Guardianship and Administration Act 1995 (Tas) is that theBoard may make a full order which allows an administrator to make all thefinancial decisions for the person with the disability only if such an order is the

173 Ibid. s 54(1).174 Ibid. s 54(1)(d) and (2).175 For a description of the Board appointing the Public Trustee as administrator see, KB and RB vGuardianship and Administration Board [2007] TASSC 45.176 Acts Interpretation Act 1931(Tas) s 24(d).177 See Guardianship and Administration Act 1995 (Tas) s2 20(6) and 22.

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least restrictive of the person’s freedom of decision-making and action as ispossible in the circumstances.

8. 6. 7. 3. Emergency administration ordersThe Board has the power to make an emergency order appointing the PublicTrustee as the administrator of the estate of a person whose estate is not alreadyunder administration applying the same processes and criteria as for appointinga guardian where it is proper to do so for reasons of urgency.178 Theseprocesses and criteria are set out Chapter 6. 5. 7. 3.

8. 6. 8. Powers and duties of an administratorIn Tasmania administrators must at all times act in the best interests of theperson whose estate they are administering. This involves them acting as far aspossible:

1. in such a way as to encourage and assist the person whose estate theyare administering to become capable of administering their own estate;and

2. in consultation with that person and in taking into account as far aspossible their wishes.179

Their powers and duties are set out in the Guardianship and Administration Act1995 (Tas).180 These powers are similar to those given to administrators in NewSouth Wales and Victoria. Administrators must provide statements of accountsof the estates they are administering to the Guardianship and AdministrationBoard. The Board must examine those statements of accounts and have themaudited if necessary.181

8. 6. 9. Administrators may seek adviceAn administrator may apply to the Board for advice or directions on any matterrelating to:

1. the scope of the administration order appointing them, or2. the exercise of any power by the administrator under that order.182

If the Board receives such an application, it may require notice of theapplication to be given to any person that the Board directs. However, theBoard may exercise its powers in relation to such an application withoutconducting a hearing. After considering the application, the Board may:

1. approve or disapprove of any act proposed to be done by theadministrator,

178 Ibid. s 65.179 Guardianship and Administration Act 1995 (Tas) s 57.180 Ibid. ss 56-60.181 Ibid. s 63.182 Ibid. s 61(1).

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2. give such advice as it considers appropriate, and3. vary the administration order or make any other order that it could have

made on the original application relating to the administration of theestate that it considers necessary.183

In addition, the Board of its own motion may direct, or offer advice to, anadministrator in respect of any matter relevant to the administrator’sadministration of the estate.184

8. 6. 10. Reviews of administration ordersAs with guardianship orders, the Board may make administration orders for amaximum of three years. After that they will expire unless they are continuedafter a review.185 However, the Board is also empowered to hold a hearing toreview an administration order at any time. It may do so:

1. on its own initiative,2. on application by, or on behalf of, the person whose estate is under

management, or3. on the application of any other person.186

8. 6. 11. Parties to reviews of guardianship ordersIn Tasmania the parties to reviews of administration orders are those personsthat procedural fairness requires to be treated as parties. These are at least thefollowing:

1. the person the order is about,2. the administrator of their estate,3. the applicant for the review if they are neither the administrator nor the

person whose estate is under administration.

Others, such as the spouse of the person whose estate is under administration,may be entitled to be parties, but that will depend on the circumstances of thecase. However, it not necessary to be a party to be able to attend a review andto give evidence at it

8. 6. 12. Powers of the Board on reviewAfter conducting the review hearing, the Board may vary or continue theadministration order, subject to any conditions or requirements it considersnecessary, or it may revoke the order. Also, the Board may make such furtherorders as it considers necessary in order to give effect to the administrationorder.187

183 Ibid. s 61(2) and (3).184 Ibid. s 61(4).185 Ibid. s 52.186 Ibid. s 67.187 Ibid. s 68.

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In a 2004 case the Board received an application for an early review of anadministration order from the administrator. She wished to resign asadministrator citing emotional conflict within the family. After considering thecircumstances of the case, including the claim of another family member forappointment as administrator, the Board varied its original order by appointingthe Public Trustee as administrator. The Board concluded its reasons fordecision as follows:

The evidence received indicated to the Board that appointment ofanother family member would exacerbate existing conflicts. Whileappointment of the Public Trustee cannot solve those conflicts, it canensure that decisions made about Mrs P’s estate are made independentlyfrom that conflict and for a single purpose of ensuring her bestinterests.188

8. 7. Victoria8. 7. 1. Who has jurisdiction to appoint financial managers?The opinion of Morris J that Victoria has comprehensive laws relating toguardianship and administration matters and the Victorian Civil andAdministrative Tribunal (VCAT) has a wide jurisdiction to deal with them hasbeen noted a number of times. While the Supreme Court of Victoria’s parenspatriae jurisdiction may continue to exist, that Court has preferred to leave themaking of administration orders to VCAT.189 This approach was noted in a2006 case.190 Consequently, for the purposes of this chapter, only VCAT’sjurisdiction to deal with applications in relation to administration matters,under the Guardianship and Administration Act 1986 (Vic) will be considered.

8. 7. 2. Who may apply for an administration order?Any person may apply to VCAT for an order appointing an administrator of theestate of a person with a disability who is 18 years old or older or for such anorder to take effect when the person reaches 18 years, if that person is residentin Victoria and they have real or personal property in Victoria.191 If the personis not resident in Victoria, the application cannot be made until they havereached 18 years of age and may apply only to that part of their estate that is inVictoria.192

8. 7. 3. Who may take part in the hearing as a party?The following are automatic parties to an application:

1. the applicant who can be any person,2. the person the application is about (the person),

188 JMP (Admin Review) 21. 5. 04, [25], www.guardianship.tas.gov.au.189 Gardner; re BWV [2003] VSC 173, [99], 7 VR 487.190 XYZ v State Trustees Ltd [2006] VSC 444, [73].191 Guardianship and Administration Act 1986 (Vic) s 43(1).192 Ibid. s 43(2).

http://www.guardianship.tas.gov.au/

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3. the proposed administrator, and193

4. anyone made a party to the application by VCAT.194

The following are entitled to notice of the application, the hearing and anyorder made as a result of the application:

1. the nearest relative available of the person the application is about, 195

2. the primary carer (if any) of the person the application is about,196

3. the Public Advocate,4. any guardian of the person the application is about, and5. any person who has advised VCAT of their interest in the person the

application is about or in their estate.197

8. 7. 4. What has to be proved before an order can be made?Before VCAT may make an administration order, it must be satisfied that theperson the application is about:

1. is a person with a disability,2. that by reason of that disability is unable to make reasonable judgments

concerning matters relating to all or any part of their estate,3. is in need of an administrator of their estate, and4. an administration order would be in their best interests.198

In a 2006 case, Cavanough J pointed out that the first three of these matters areseen as separate and cumulative requirements and should not be conflated. Hesaid that the question of whether the person was “in need of an administrator”did not arise unless and until VCAT was satisfied, first, that they were a“person with a disability” and that, second, because of that disability they wereunable to make reasonable judgments about all or part of their estate. He alsonoted that, generally speaking, the question of “need” would be answeredprimarily by reference to the availability or otherwise of alternativearrangements outside administration (such as family support) to compensate foror deal with the person’s identified “inability”.199

193 Ibid. s 43(3). However, note that it is not necessary to nominate a proposed administrator. VCATwill decide who is to be the administrator if it determines that an administrator should be appointed.194 Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 60.195 Guardianship and Administration Act 1986 (Vic) s 44(a). The “nearest relative: of the person is theirspouse or domestic partner or, where they do not have a spouse or domestic partner, the first listedrelative in list below who is 18 years or older. If there are of two or more relatives at the same levelthen the elder or eldest: (a) son or daughter; (b) father or mother; (c) brother or sister; (d) grandfather orgrandmother; (e) grandson or granddaughter; (f) uncle or aunt; (g) nephew or niece, see ibid. s 3. Thenearest relative available is the nearest relative available to take part in the proceedings.196 The primary carer of the person is the person who is primarily responsible for providing support orcare to the person, see ibid. s 3.197 Ibid. s 44.198 Ibid. s 46(1) and (3).199 XYZ v State Trustees Ltd [2006] VSC 444, [44]-[45]

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The Guardianship and Administration Act 1986 (Vic) also requires VCATwhen determining whether or not a person is in need of an administrator oftheir estate, to consider whether the needs of the person the application is aboutcould be met by other means that were less restrictive of their freedom ofdecision and action.200 Also, any administration order that VCAT makes mustbe the least restrictive of freedom of decision and action of the person the orderis about as is possible in the circumstances.201

8. 7. 5. Appointing an administratorWhere VCAT is satisfied that it is in the best interests of the person the hearingis about to make an administration order in relation to their estate, it mayappoint either a private person, the State Trustees or a trustee company as theadministrator of the person’s estate. Unlike with the appointment of a guardian,there is no statutory requirement preventing VCAT appointing either the StateTrustees or a trustee company as the administrator of the person’s estate only ifno private person meets the tests set out below. VCAT has a wider discretion asto whom it may appoint, but that discretion is limited by the preferenceestablished in the common law to appoint a family member provided that thatis in the best interests of the person the hearing is about and that familymember meets the requirements set out in the next paragraph.202

Before VCAT may appoint a private person as the administrator of the person’sestate it must be satisfied that the proposed administrator is 18 years or olderand consents to be the administrator and that the proposed administrator:

1. will act in the best interests of the person the hearing is about,

2. is not in a position where their interests conflict or may conflict with theinterests of the person the hearing is about,203

3. is a suitable person to act as the administrator of the estate of the personthe hearing is about, and

4. has sufficient expertise to administer the estate. 204

If a person met the first three of these criteria and there was a specialrelationship or some other special reason why the proposed administratorshould be appointed, then VCAT may appoint them.205

When deciding whether a person is suitable to be the administrator, VCATmust take into account:

1. the wishes of the person the hearing is about,

200 Guardianship and Administration Act 1986 (Vic) s 46(2).201 Ibid. s 46(4).202 The relevant common law is discussed below at 8. 11. 11 and 8. 11. 12..203 Where a parent or nearest relative of person the hearing is about is proposed as the administrator,that person is not, by virtue only of the fact that they are the person’s parent or nearest relative, to betaken to be in a position where their interests conflict or may conflict with those of the person thehearing is about. See, Guardianship and Administration Act 1986 (Vic) s 47(3).204 Guardianship and Administration Act 1986 (Vic) s 47(1)(c).205 Ibid. s 47(1)(c)(iv).

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2. the compatibility of the prospective administrator with the person thehearing is about and with their guardian (if any). 206

8. 7. 6. Joint/several/alternate administratorsAlthough VCAT has specific statutory power to appoint joint guardians, it isnot given the same power to appoint joint administrators.207 Nevertheless,under the normal rules of statutory interpretation, VCAT could appoint jointadministrators. While doing so can create difficulties as joint administratorshave to make all the administration decisions jointly and be in agreement aboutthose decisions, VCAT and tribunals elsewhere in Australia do appoint jointadministrators.208

While the Guardianship and Administration Act 1986 (Vic) does not deal withthe matter in terms, VCAT does occasionally appoint “concurrent”administrators. For example, VCAT has appointed a firm of solicitors asadministrator with power limited to “bringing, maintaining or concluding” aparticular proceeding in the Magistrates’ Court proceeding while, at the sametime, maintaining the appointment of the State Trustees to administer all of therest of the incapable person’s estate.209 .

VCAT has no statutory authority to appoint alternative administrators. If anadministrator dies, resigns or becomes physically, mentally or legally incapableof administering the estate they were appointed to administer, then a party tothe application may apply for a rehearing of the application so that a newadministrator may be appointed.210

8. 7. 7. Types of administration orders8. 7. 7. 1. Plenary ordersUsually when VCAT appoints an administrator, it gives the administrator allthe powers and duties of an administrator in relation to all of the estate of theincapable person.

8. 7. 7. 2. Concurrent orders involving different aspects of an incapableperson’s estateAs already noted in 8. 7. 6 above, VCAT may appoint concurrentadministrators responsible for different aspects of an incapable person’s estate.

8. 7. 7. 3. Orders with part of the estate excludedWhile in most cases it will appoint the administrator to administer the whole ofthe estate, VCAT may also make orders which apply to part of a person’s estateand leave other parts of the person’s estate under their control.211 It is not

206 Ibid. s 47(2).207 Ibid. s 23(5).208 For a Victorian example see, FF and IF (Guardianship) [2007] VCAT 1298.209 GM (Guardianship) [2007] VCAT 1313.210 Guardianship and Administration Act 1986 (Vic) s 60A.211 Ibid. s 52(1).

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uncommon for VCAT to appoint an administrator just to conduct proceedingsin the Family Court or to apply for a maintenance order under theAdministration and Probate Act 1958 (Vic) on behalf of an incapable person, tolodge a caveat to protect an incapable person’s interest in certain land or toadminister a pool of money that an incapable person may have inherited, beengifted or won while leaving them in control of the rest of their estate.

8. 7. 7. 4. Temporary ordersAny person can apply to VCAT to make a temporary administration order,whether or not an application can be made for a “normal” administration order.Those entitled to notice of a normal application have the same entitlements inrelation to an application for a temporary order.212

Before VCAT may make a temporary administration order, it must be satisfiedthat the person the application is about:

1. is a person with a disability,2. that by reason of that disability is unable to make reasonable judgments

concerning matters relating to all or any part of their estate, and3. is in need of an administrator of their estate

Temporary administration orders may remain in effect for a maximum of 21days. VCAT may renew them but only once and for a maximum of 21 days.213

VCAT must hold a hearing within 42 days of making a temporaryadministration order to decide whether or not to make a normal administrationorder in relation to the person the subject of the temporary order.214 VCATmakes few of these orders, but they are sometimes required to protect aninheritance or a substantial sum of money that is about to or has come into thehands of an incapable person and VCAT is not possible to convene a fullhearing of an administration application immediately.

8. 7. 8. The role of VCAT after making an administration orderUnlike in New South Wales where the NSW Trustee has the role of givingadministrators their authorities and supervises their management of the estatesthey have been appointed to administer, in Victoria VCAT is responsible forawarding their powers and duties to administrators. VCAT also sets out thearrangements for the examination or auditing of the accounts of the estatesunder administration. It also gives directions and advice to administrators aboutthe estates they are administering and reassessing administration ordersperiodically, on application or on its own initiative.

8. 7. 8. 1. Giving advice etcVCAT may on its own initiative direct, or give an advisory opinion to, an

212 Ibid. s 59.213 Ibid. s 33(2).214 Ibid. s 33(3).

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administrator concerning any matter.215 In addition, any administrator mayapply to VCAT for the advice about any matter relating to the scope of theiradministration order or the exercise of any power by them under theadministration order.216 When dealing with such an application VCAT may,approve or disapprove of any act proposed to be done by the administrator,give such advice as it considers appropriate and make any order that itconsiders necessary.217

Where State Trustees Ltd wishes to commence proceedings acting in onecapacity or on behalf of one person whose estate they are administering againstState Trustees Ltd acting in another capacity or on behalf of another personwhose estate they are administering, they must seek and obtain an order fromVCAT approving such action.218 Where this situation arises, State Trustees Ltdmay deal with the matter by taking action to have another administratorappointed to administer the estate of one of the parties to the proceedings.

Any person who has an interest as a creditor, beneficiary, next of kin, guardian,nearest relative, primary carer or otherwise in any estate being administered byan administrator appointed by VCAT or the Public Advocate may apply toVCAT about any matter arising out of the administration of the estate by theadministrator. VCAT may make such order in relation to the application as thecircumstances of the case may require.219 While this right to apply about anymatter arising out of the administration of the estate by the administrator isgiven to a range of people, it is likely that their right to apply would be limitedto issues in which they have a clearly identifiable or legitimate interest.

In order to assist VCAT to deal with any question of advice or other order inrelation to the administration of estate the subject of an administration order,VCAT may open and read the will of the person whose estate is underadministration and the subject of proceedings before VCAT.220 While VCAT’sapplication form encourages applicants to find the will of the person thehearing is about and applicants sometimes bring the person’s will to thehearing, VCAT will only look at the will when there is a need to. However, ifthe person whose estate is under administration makes a will between the timean administration order is made in relation to them and the reassessment of thatorder, VACT is likely to look at that will.

8. 7. 8. 2. Accounts

215 Ibid. s 55(4A).216 Ibid. s 55(1). See, RL (Guardianship) [2007] VCAT 2486 and GM (Guardianship) [2007] VCAT1658.217 Ibid. s 55(4).218 Ibid. s 55(2).219 Ibid. s 56.220 Ibid. s 54.

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Usually at the time that it appoints the administrator of an estate, but sometimesat a later time, VCAT will appoint a person to examine or audit the accounts ofthe estate for a fee that VCAT approves and which is paid from the estate.221

In almost all cases the State Trustees Ltd is appointed as the examiner.VCAT will receive a report from the examiner or auditor. If that reportrecommends the disallowance of any item in the accounts, VCAT must dealwith that matter. However, it may not make an order disallowing an item if it issatisfied that the administrator acted in good faith and with reasonable care inthe exercise of their powers as administrator. If any item is disallowed theadministrator is liable for the amount of the item disallowed.222

8. 7. 9. Powers and duties of administratorsWhen VCAT appoints administrators those administrators are automaticallyinvested with certain powers and duties.223 In addition VCAT may giveadministrators, in the orders appointing them, one or more of a set of furtherpowers set out in the Guardianship and Administration Act 1986 (Vic).224

8. 7. 9. 1. The powers and duties of all administrators.All administrators appointed by VCAT have the following powers and dutiesby virtue of their appointment.

Duties of all administratorsAdministrators must act in the best interests of the person whose estate theyhave been appointed to administer. They do this if they act in the person’s bestinterests generally and in particular they act as far as possible:

1. so as to encourage and assist the person to become capable ofadministering their own estate, 225

2. in consultation with the person, and3. take into account, as far as possible, the wishes of the person.226

They must also keep accounts for each estate that they administer and havethose accounts examined or audited by a person appointed for the purpose byVCAT.227

Powers of all administratorsAll administrators have the general ancillary power to sign and do all suchthings as are necessary to give effect to any power or duty vested in them as an

221 Ibid. s 58(1).222 Ibid. s 58(2C),(3) and (4).223 Ibid. s 48(1). Those powers and duties are found in ss 49 to 58 of the Guardianship andAdministration Act 1986 (Vic). They are discussed in the paragraphs immediately below in 8. 7. 9. 1. Amore general discussion of the powers and duties of administrators is found in 8. 11. 14.224 Ibid. s 48(1). Those powers and duties, found in ss 58B to 58G, are set out below in 8. 7. 9. 1.225 This matter is taken seriously by VCAT and will be considered when it is reassessing administrationorders. See for example, PL (Guardianship) [2007] VCAT 2458.226 Ibid. s 49.227 Ibid. s 58.

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administrator. However, they may not execute a will in the name of the personwhose estate they are administering.228

Administrators may apply to VCAT for advice about any matter relating to thescope of their administration order or the exercise of any power by themadministrator under that administration order.229

Any administrator may make gifts of the property of the person whose estatethey are administering, but only if:

1. the value of the gift is not more than what is reasonable in all thecircumstances and, in particular, the person's financial circumstances,

2. the gift is;(i) to a relative or close friend of the person and is of a seasonal natureor for a special event (including, for example, a birth or marriage),(ii) a type of donation that the person had made when they had thecapacity to do so or might reasonably be expected to make.230

Administrators themselves or any charity with which they have a connection isnot precluded from receiving such gifts.231 However, administrators must notifyVCAT in writing if the value of the gift, or the total value of the gifts to theadministrator, or a charity with which the administrator has a connection, is$100 or more.232

Private administrators and trustee companies appointed as administrators, butnot the State Trustees Ltd, which has investment powers under its own Act,may:

1. for such period as the administrator thinks fit allow any part of the estateto remain invested in the manner in which it had been invested by thethe person whose estate they are administering,

2. in the case of money deposited in an authorised deposit-takinginstitution within the meaning of the Banking Act 1959 (Cth) re-depositit after it becomes payable.233

Private administrators and trustee companies appointed as administrators haveand may exercise in relation to any part of the estate they are administering thesame powers, including powers of investment, as the administrator would have

228 Ibid. s 50.229 Ibid. s 55.230 Ibid. s 50A(1).231 Ibid. s 50A(2).232 Ibid. s 50A(3).233 Ibid. s 51(1)(a) and (b). For the powers of the State Trustees as an administrator, not set out in theGuardianship and Administration Act 1986 (Vic), see State Trustees (State Owned Company) Act 1994(Vic).

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if the administrator were a trustee of that part of the estate under the TrusteeAct 1958 (Vic).234

Administrators must keep separate accounts for the estates they areadministering. They must lodge these accounts as soon as practicable after, theanniversary of their appointment as administrator each year. These accountsmust provide a full and true account of the assets and liabilities of the estateand all receipts and disbursements relating to it.235 Sometimes VCAT mayrequire an administrator to lodge accounts at another time.236 The examiner orauditor will examine the accounts and must lodge with VCAT a report inrelation to those accounts.237

In addition to the powers and duties conferred on all administrators appointedby VCAT as a consequence of their appointment, there are certain powers andduties that may be imposed upon them in the order appointing them.

Duties that VCAT can impose on an administratorWhile VCAT has a discretion as to whether it imposes all the duties listedbelow on an administrator, its practice is to do so.238 These duties are to:

1. have the general care and management of the estate,2. take possession and care of, recover, collect, preserve and administer the

property and estate,3. generally manage the affairs of the person,4. exercise all the statutory or other rights which the person might exercise

if they had legal capacity, and5. in the name and on behalf of the person may generally do all acts and

exercise all powers concerning the estate as effectually and in the samemanner as the person whose estate they are administering could havedone if they were not under a legal disability.239

Powers that VCAT can give to an administratorWhile VCAT has a discretion as to whether it gives all the powers listed belowon an administrator, its practice is to do so.240 These powers that anadministrator may exercise, in the name and on behalf of the person whoseestate they are administering, are to:

1. collect, receive and recover income of and money due or which becomesdue to and any compensation or damages for injury to the estate orperson of the person,

234 Ibid.s 51(1)(c). See also s 53(4).235 Ibid. s 58(2).236 Ibid. s 58(2A).237 Ibid. s 58(2B).238 Ibid. s 48(1).239 Ibid. s 58B.240 Ibid. s 48(1).

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2. invest any money in any security in which trustees may by law invest,3. grant a lease of land at a rent and on conditions as the administrator

thinks fit for any term not exceeding 5 years or, with the consent ofVCAT, for any longer term,

4. exercise to the extent and in the manner the administrator thinks properany power of leasing that is vested in the person whose estate they areadministering,

5. surrender any lease, accept any lease, accept the surrender of any leaseor renew any lease,

6. bring land under the Transfer of Land Act 1958 (Vic),7. sell, exchange, partition or convert into money any property,8. mortgage or charge any property,9. pay any debts and settle, adjust or compromise any demand made by or

against the estate and discharge any encumbrance on the estate,10. carry on so far as appears desirable any trade, profession or business

which the person carried on,11. agree to any alteration of the conditions of any partnership into which

the person has entered or to a dissolution and distribution of the assets ofthe partnership,

12. bring and defend actions and other legal proceedings in the name of therepresented person,

13. execute and sign deeds, instruments and other documents,14. complete any contract for the performance of which the person was

liable, or enter into any agreement terminating liability,15. pay any sum for the maintenance of the person (and, in the event of

their death, for funeral expenses) and for the maintenance of theirspouse or domestic partner or any child, parent or other persondependent on them and for the maintenance and education of theirchildren as to the administrator seems expedient and reasonable,

16. do all matters necessary or incidental to the performance of any of thematters set out above and apply any money from the estate which it isnecessary to apply for the purposes of the Guardianship andAdministration Act 1986 (Vic).241

In addition VCAT may give the administrator any of the following powers toexercise if the administrator considers it expedient and reasonable to do so.VCAT usually gives these powers too. They are:

1. pay or cause to be paid to the person for their personal use any amountof their money that the administrator has control of,

2. give or cause to be given to the person for their personal use anypersonal property which belongs to them and is under the control of theadministrator.242

241 Ibid. s 58B(2).242 Ibid. s 58B(3).

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3. If a person whose estate is being administered has a power vested inthem for their benefit or their consent is necessary to the exercise of apower and the power or consent is in the nature of a beneficial interestheld by them, the administrator may exercise that power or consent inany manner the administrator thinks fit if it appears to the administratorto be for the benefit of the represented person that the power should beexercised or the consent given. Administrators have a similar discretionif the power or consent is given to the person whose estate they areadministering in the character of a trustee or guardian.243

An administrator may open and read the will of the person whose estate theyare administering.244 This is a prudent step, particularly if the person hasconsiderable assets and property as they may have left specific bequests ofsome of their real and personal property. It is preferable to avoid selling suchreal or personal property or changing its character as part of the administrationof the estate during the lifetime of the person whose estate they areadministering if that is possible while still acting in the best interests of theperson.

On its website VCAT advises that it usually requires administrators to providea financial statement and plan about how they intend to manage the estatewithin six weeks after the date of the administration order. Also, VCAT usuallyrequires administrators to lodge statements of accounts of the estates they aremanaging each financial year. These are examined by the State Trustee.245

8. 7. 10. Effect of a financial management orderThe real and personal property the subject of the administration remains theproperty of the person the order is about even if the nature of that propertychanges, for example, by land or shares being sold and converted intomoney.246 Nevertheless, while an administration order applies to a person’sestate, the person the order is about cannot deal with, transfer, alienate orcharge their money or property or any part of it that is under the control of theadministrator or become liable under any contract in relation to that part of theestate, unless:

1. VCAT orders that the person may deal with their property or becomeliable under a contract, or

2. the administrator gives their written consent to them so dealing orbecoming so liable.247 In exercising this discretion, administrators do nothave to obtain the consent of VCAT.

243 Ibid. s 58C. These are complex matters in relation to which an administrator should obtain expertlegal advice before exercising any discretion on behalf of the person whose estate they areadministering.244 Ibid. s 58G.245 See VCAT website, www.vcat.vic.gov.au.246 Ibid. s 53.247 Ibid. s 52(1).

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Every dealing, transfer, alienation or charge by the person in relation of anypart of the estate which is under the control of the administrator is void and ofno effect. Also, any money or property the subject of any such dealing,transfer, alienation or charge is recoverable by the administrator in any court ofcompetent jurisdiction. However, any dealing, transfer, alienation or charge byany person the subject of an administration order made for adequateconsideration with or to or in favour of any other person who proves that theyacted in good faith and did not know or could not reasonably have known thatthe person was the subject of an administration order remains valid.248

8. 7. 11. Requested rehearingsIn Victoria, VCAT can rehear an application for an administration order if anapplication is made to it regardless of whether an administration order wasmade or the application was dismissed at the first hearing. If this happens, thematter is reheard by a more senior member. No rehearing can be applied for ifVCAT makes a temporary order or if the President of VCAT hears theapplication alone or with others.249

8. 7. 11. 1. Who may apply?The Public Advocate, an automatic party or a person entitled to notice of theapplication may apply to for a rehearing of the application.250 A person entitledto notice of the application who did not become a party at the initial hearingmay apply for a rehearing, but only if VCAT gives them leave to do so.251 Theapplication for a rehearing, or for leave to apply for a rehearing, must be madewithin 28 days after the day of the order.252

8. 7. 11. 2. Parties to rehearings of applications for administration ordersAnyone who was a party to the hearing of an application for an administrationorder is a party to a rehearing of the application, in addition to any other partiessuch as a person given leave to apply for a rehearing or a person joined as aparty by VCAT. Anyone was entitled to notice of the initial application isentitled to notice of the application for a rehearing.253

8. 7. 11. 3. Powers of VCAT at the rehearingVCAT must rehear the matter but in doing so has all the functions and powersit had at the first hearing. After rehearing the application, VCAT may:

1. affirm the order made at the first hearing,2. vary that order,

248 Ibid. s 52(3).249 Ibid. s 60A(1) and (6). For an example of an application for a rehearing in a guardianship matter see,Public Advocate v RCS [2004] VCAT 1880.250 Ibid s 60A(1) and(3).251 Ibid. s 60A(2).252 Ibid. s 60A(4).253 Ibid. s 60A.

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3. set aside that order and make another order instead.254

8. 7. 12. Reassessments of administration ordersIn Victoria administration orders, as with guardianship orders, are the subjectof periodical reassessment. They can also be the subject of requestedreassessments.255

VCAT must conduct a reassessment of any administration order within 12months after making the order, unless it orders otherwise, but must reassess theorder at least once within each three year period after making the order.However, again VCAT has the discretion to order otherwise.256 In practicewhere VCAT makes a longer order, it is usually only for three months or lesslonger and for administrative convenience.

Nevertheless, VCAT may at any time conduct a reassessment of anadministration order made by it either on its own initiative or on the applicationof any person.257

8. 7. 12. 1. Parties to reassessmentsThe following are automatic parties to a reassessment:

1. the person whose estate is under administration, and2. the administrator.258

The following are entitled to notice of the making of the application forreassessment, the hearing and any order made as a result of the reassessment:

1. the nearest relative available of the person the application is about, 259

2. the primary carer (if any) of the person the application is about,260

3. the Public Advocate,4. any guardian of the person the application is about.

Note that if VCAT intends to conduct a reassessment either as a periodic one oron its own initiative and does not propose to amend, vary or replace the order itmay give notice to the automatic parties and the others referred to above that

254 Ibid. s 60(2).255 Ibid. s 61.256 Ibid. s 61(1).257 Ibid. s 61(2).258 Ibid. s 62(1).259 Ibid. s 62(1)(a). The “nearest relative: of the person is their spouse or domestic partner or, wherethey do not have a spouse or domestic partner, the first listed relative in list below who is 18 years orolder. If there are of two or more relatives at the same level then the elder or eldest: (a) son or daughter;(b) father or mother; (c) brother or sister; (d) grandfather or grandmother; (e) grandson orgranddaughter; (f) uncle or aunt; (g) nephew or niece, see ibid. s 3.260 The primary carer of the person is the person who is primarily responsible for providing support orcare to the person, see ibid. s 3.

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they can request a hearing of the reassessment. If no hearing is requestedVCAT may conduct its reassessment “on the papers” without a hearing.261

8. 7. 12. 2. Orders after reassessmentsAfter completing the reassessment VCAT may amend, vary, continue orreplace the administration order subject to any conditions or requirements itconsiders necessary; or it may revoke the order.262

8. 8. Western Australia8. 8. 1. Who has jurisdiction to appoint administrators?As already noted in Chapter 6. 8. 1, the Supreme Court of Western Australia’sinherent jurisdiction, of which the parens patriae jurisdiction is part, is notaffected by the Guardianship and Administration Act 1990 (WA) which givesWestern Australia’s State Administrative Tribunal (WASAT) its jurisdiction tomake administration orders.263 While the Court retains its jurisdiction, mostapplications for administration orders are made to WASAT. This appears to besupported by the Supreme Court which acknowledged the specialistjurisdiction of WASAT in a 2007 case.264

8. 8. 2. Who may apply for an administration order?Anyone may apply to WASAT for an administration order relating to real andpersonal property in Western Australia, including that part of the estate whichis in Western Australia of a person who is neither resident nor domiciled inWestern Australia.265

8. 8. 3. Who may take part in the hearing as a party?The executive officer of the Tribunal must give notice of the hearing at least 14days in advance to the following so that they can attend if they wish:

1. the applicant,2. the person the hearing is about,3. their nearest relative,4. the Public Advocate,5. any proposed administrator,6. the Public Trustee7. the guardian of the person if one has been appointed, and8. any other person who in the opinion of the executive officer has a proper

interest in the proceedings. 266

8. 8. 4. What has to be proved before an order can be made?

261 Ibid. s 62(2A).262 Ibid. s 63. For an example of a reassessment of an administration order see, BB [2006] VCAT 1482.263 Guardianship and Administration Act 1990 (WA) s 3A. See also Mr CAD [2001] WAGAB 1 [9] and[10], (2001) 28 SR (WA) 333,335.264 Rowell v Calder [2007] WASC 23.265 Ibid. ss 40 and 67(1).266 Ibid. s 41.

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Before WASAT may appoint an administrator for a person, it must be satisfiedthat the person is:

1. unable, because of mental disability, to make reasonable judgmentsabout matters relating to all or any part of their estate, and

2. in need of an administrator of their estate.267

When dealing with an application to appoint an administrator, the primaryconcern of WASAT is the best interests of the person the application isabout.268 It must also presume that the person the hearing is about is capable oflooking after their own affairs and can make reasonable judgments aboutmatters relating to their estate until the contrary is proved to the satisfaction ofWASAT. In addition, the Tribunal must, as far as possible to do so, get theviews and wishes of the person the hearing is about however it can when theapplication is being dealt with or by gathering those views and wishes from theperson’s previous actions.269

WASAT must not make an administration order if the needs of the person theapplication is about could be met by other means less restrictive of the person’sfreedom of decision and action.270 Also, any administration order it makes mustbe in terms that WASAT considers impose the least restrictions possible, in thecircumstances of the case, on the person’s freedom of decision and action.271

8. 8. 5. Appointing an administratorIf WASAT decides to make an administration order, it must first declare thatthe person the hearing is about is in need of an administrator for their estate andthen proceed to appoint an administrator or joint administrators.272 Also, theorder may be subject to such conditions and restrictions that WASAT thinksfit.273

WASAT may appoint as private administrators only adults 18 years and abovewho have consented to being appointed administrator.274 Before appointingthem, the Tribunal must be of the opinion that they:

1. will act in the best interests of the person whose estate they areappointed to administer, and

2. are otherwise suitable to act as the administrator of the estate of thatperson.275

267 Ibid. s 64(1).268 Ibid. s 4(2)(a).269 Ibid. s 4(2)(f).270 Ibid. s 4(2)(c).271 Ibid. s 4(2)(e).272 Ibid 64(1)(c)and(d).273 Ibid. s 64(3)(a).274 Ibid. s 68(1)(a).275 Ibid. s 68(1)(c)and(d).

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When considering the suitability of a proposed private administrator forappointment, WASAT is required to take into account as far as possible:

1. the compatibility of the proposed administrator with the person thehearing is about and with the any guardian of that person,

2. the wishes of the person the hearing is about, and3. whether the proposed appointee will be able to perform the functions

proposed to be vested in them as administrator.276

The fact that a proposed administrator is the guardian of the person the hearingis about does not disqualify them from being appointed as the administrator ofthe estate of that person.277

WASAT may also appoint as the administrator (or a joint administrator) of anestate, the Public Trustee or a trustee company which has consented to being soappointed.278 As with private administrators, the Tribunal must be of theopinion before appointing them that they:

1. will act in the best interests of the person whose estate they areappointed to administer, and

2. are otherwise suitable to act as the administrator of the estate of thatperson.279

Furthermore, when considering the suitability of a trustee company forappointment as administrator, WASAT is required to take into account as far aspossible:

1. the compatibility of the trustee company with the person the hearing isabout and with the any guardian of that person,

2. the wishes of the person the hearing is about, and3. whether the trustee company will be able to perform the functions

proposed to be vested in it as administrator.280

This requirement also applies to the Public Trustee281 However, there arefurther limits that apply to trustee companies but not to the Public Trustee.282 Atrustee company may not be appointed as an administrator unless WASAT issatisfied that either there is an individual who would otherwise be appointed as

276 Ibid. s 68(3).277 Ibid. s 68(4).278 Ibid. ss 3(1) and 68(1)(b).279 Ibid. s 68(1)(c)and(d).280 Ibid. ss 3(1) and 68(1)(b)and(3).281 Ibid.282 While the Public Trustee is defined as a corporate trustee in s. 3 of the Guardianship andAdministration Act 1990 (WA), it is not a trustee company under the Trustee Companies Act 1987(WA). Consequently, the provisions of s. 68(2) of the Guardianship and Administration Act 1990 (WA)do not apply to the Public Trustee. See, AG [2007] WASAT 7, [66].

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administrator and that individual has in writing requested the appointment ofthat trustee company or the person in the hearing is about has made a willappointing the trustee company as executor and the will remains unrevoked atthe time of the appointment.283 Also, as WASAT has noted:

[T]here is a statutory preference for an unpaid individual to act asadministrator over a corporate trustee, where such a person who issuitable for appointment exists in the life of the represented person. Thatstatutory preference of an individual over a corporate trustee asadministrator does not apply to the Public Trustee.284

In Western Australia, the Public Advocate may be appointed as a jointadministrator, but WASAT must not appoint the Public Advocate as soleadministrator unless there is no other individual or corporate trustee who issuitable and willing to act as administrator of the estate of the person theparticular hearing is about.285 The Former Gaurdianship and AdministrationBoard of Western Australia saw the Public Advocate as administrator of lastresort.286 However, circumstances could arise in which it was inappropriate toappoint the Public Trustee, leading to the Public Advocate being appointed.However, the fact that it may be preferable to appoint the Public Advocate doesnot render the Public Trustee unsuitable for appointment, nor does the fact thatthe Public Trustee is required to charge fees fixed by Parliament. In additionthe Public Trustee has provided a “standing consent” to being appointed.287

8. 8. 6. Joint/concurrent/alternate administratorsAs just noted, WASAT may appoint joint administrators.288 As WASAT mayappoint administrators for limited functions such as to conduct legalproceedings on behalf of the person whose estate they are administering, it islikely that it will need to appoint “concurrent” administrators from time to timewhere one administrator has one or more functions and an anotheradministrator has one or more other functions.289

WASAT has no statutory authority to appoint alternative administrators.

8. 8. 7. Types of administration orders8. 8. 7. 1. Orders giving plenary or limited functionsIn Western Australia, WASAT has a discretion to give an administrator all thefunctions of an administrator (plenary functions) or to give them only the

283 Ibid. s 68(2).284 AG [2007] WASAT 7, [66]. See also, Guardianship and Administration Act 1990 (WA) s 117.285 Guardianship and Administration Act 1990 (WA) s 68(5).286 Mr CAD [2001] WAGAB 1 [15]. See also Re SMPM [2004] WAGAB 3.287 Re SMPM [2004] WAGAB 3 [11]-[13].288 Guardianship and Administration Act 1990 (WA) s 64(1)(d).289 See for example, Mr CAD [2001] WAGAB 1 and GM (Guardianship) [2007] VCAT 1658.

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functions of an administrator set out in the order appointing them. 290

Consequently administrators can be appointed for limited purposes.

8. 8. 7. 2. What the Tribunal may do in an emergencySometimes situations arise in which an application is made and it appears to theTribunal that a person may be someone who needs an administration order, butit is not possible for the evidence to prove this to WASAT to be gathered andpresented or for appropriate notice to be given or a procedurally fair hearing tobe conducted; nevertheless it is necessary to make immediate provision for theprotection of the person’s estate. In these circumstances WASAT, pendingdetermination by it of the question whether the person is, in fact, a person inrespect of whom an administration order should be made, may exercise such ofthe powers conferred on it by the Guardianship and Administration Act 1990(WA) as may be necessary for the protection of the person’s estate.291 Suchpowers could include power to collect urgently money that would otherwisecome into the hands of the person the hearing was about and may be quicklydissipated or lost by that person.

8. 8. 7. 3. Orders authorising actions without administration ordersWhere a person is, because of mental disability, unable to make reasonablejudgments about matters relating to all or any part of their estate, but there is noneed of a continuing appointment of an administrator of their estate, theTribunal may, without making such an appointment, make an order authorisingor requiring a person who could be appointed as administrator to perform anyspecified function.292 These orders are intended for situations where only oneor a few actions of a financial nature need to be taken in the interests of theincapable person, for example the sale of a property.293

8. 8. 8. Obligations and functions of an administratorAdministrators are required to act according to their opinion of the bestinterests of the person whose estate they are administering.294 They act in thebest interests of that person if they act as far as possible:

1. as an advocate for the person whose estate they are administering, inrelation to the estate,

2. in such a way as to encourage the person to live in the generalcommunity and participate as much as possible in the life of thecommunity,

290 Ibid. s 71(1) and (3). The Tribunal may authorise an administrator to perform any function specifiedin the order appointing them including any function set out in Part A of Schedule 2 of theGuardianship and Administration Act 1990 (WA).291 Ibid. s 65.292 Ibid. s 66(1).293 See for example, VGR [2006] WASAT 64.294 Ibid. s 70(1).

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3. in such a way as to encourage and assist the person to become capableof caring for themselves and of making reasonable judgments in respectof matters relating to their person,

4. in such a way as to protect the person from financial abuse, exploitationor neglect,

5. in consultation with the person, taking into account, as far as possible,the wishes of the person as expressed, in whatever manner, or asgathered from the person’s previous actions,

6. in the manner that is least restrictive of the rights, while consistent withthe proper protection, of the person,

7. in such a way as to maintain any supportive relationships the person has,and

8. in such a way as to maintain the person’s familiar cultural, linguistic andreligious environment.295

Nevertheless, none of these considerations is to be read as restricting thefunctions of an administrator may have at common law or under any writtenlaw.296 A consequence of that provision is to preserve any functions of anadministrator developed by the judge made law and not replaced by theprovisions in the Guardianship and Administration Act 1990 (WA) or otherrelevant legislation.

An administrator with plenary functions may perform any function in relationto the estate that the person whose estate they are administering could haveperformed if they were capable.297 An administrator with limited functions mayperform any function specified by WASAT in its administration order,including any common law function or any function found on Part A ofSchedule 2 of the Guardianship and Administration Act 1990 (WA) or in any inanother Act.298

Administrators are empowered to execute documents and do such things onbehalf of the person whose estate they are administering as are necessary forthe performance of the functions vested in them by the administration orderappointing them. 299 Any action an administrator takes, decision they make,consent they give or other thing that they do in the performance of thefunctions vested in them by the order appointing them has effect as if it hadbeen taken, made, given or done by the person whose estate they areadministering with full legal capacity.300

295 Ibid. s 70(2).296 Ibid. s 70(4).297 Ibid. s 71(2).298 Ibid. ss 70(4) and 71(3). The functions set out in Schedule 2B may be exercised by an administratorbut only if directed to do so by a Tribunal order.299 Ibid. s 69(2).300 Ibid. s 69(3).

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In Western Australia the supervision of administrators is undertaken by thePublic Trustee. Administrators are required, within four weeks of theirappointment, to provide the Public Trustee with information about the estate,the person whose estate they are administering and themselves. They must alsosubmit statements of accounts of the estates they are managing to the PublicTrustee who examines them.301 There is no provision for the Public Trustee toreport to WASAT about the estates he is administering, except on a review ofan administration order.

8. 8. 9. The role of Tribunal after making an administration orderWASAT’s role in relation to administration orders is not confined just tomaking and reviewing them. When it gives a function to an administrator, itmay give directions as to the time, manner or circumstances of the performanceof the function by the administrator.302

WASAT may deal with applications from administrators with limited functionsto increase their functions without the need to conduct a review of the order.303

This provision is rarely, if ever, used.

While administrators must submit their accounts to the Public Trustee inWestern Australia and the Public Trustee has, through its examination of thoseaccounts, a supervisory role over other administrators, the Tribunal may, onapplication, review decisions of the Public Trustee relation those accounts.304

8. 8. 10. Reviews of administration ordersWhen WASAT makes an administration order, it must specify a period, notexceeding five years, within which the order must be reviewed and WASATmust ensure that the order is reviewed accordingly.305 However, WASAT mustalso review an administration order if the administrator or a joint administrator:

1. dies,2. wishes to be discharged,3. has been guilty of such neglect or misconduct or of such default as, in

the opinion of WASAT, renders them unfit to continue as guardian,4. appears to WASAT to be incapable of carrying out their duties, because

of mental or physical incapacity,5. is bankrupt or a person whose property is subject to an order or

arrangement under the laws relating to bankruptcy, or6. is a corporate trustee but has ceased to carry on business, has begun to

be wound up, or is under official management or subject toreceivership.306

301 Ibid. s 80 and Guardianship and Administration Regulations 2005 (WA) regs 3 and 4.302 Guardianship and Administration Act 1990 (WA) s 71(4).303 Ibid. s 71A.304 Ibid. s 80. See also, Guardianship and Administration Regulations 2005 (WA).305 Guardianship and Administration Act 1990 (WA) s 84.306 Ibid. s 85(1).

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Any person may make an application for such a review.307 They do not have toobtain leave from WASAT to do so.

In addition to these mandatory reviews, WASAT may, at any time, review anadministration order on the application of:

1. the Public Advocate,2. the person the order is about,3. the administrator of their estate4. their guardian, or5. a person to whom leave has been granted, with or without conditions, to

conduct the review.308

8. 8. 10. 1. Parties to reviews of administration ordersAs the executive officer of WASAT is required to give those listed below atleast 14 days notice of the hearing of any of the three kinds of reviews ofadministration orders set out above, it is reasonable to assume that they areparties to any reviews to which they are given notice:

1. the applicant where there is one,2. the person the order under review is about,3. the nearest relative of that person,4. the administrator,5. if there is one, the guardian of the person the hearing is about,6. the Public Advocate, and7. any other person who in the opinion of the executive officer has a

sufficient interest in the review.309

8. 8. 11. Powers of the Tribunal on reviewAfter reviewing an administration order, WASAT may, as it considersnecessary in the best interests of the person the order is about:

1. confirm the order,2. amend the order so as to make any provision that may be included in an

administration order,3. revoke the order,4. revoke the order and substitute another order for it, or5. without revoking the order, revoke the appointment of any administrator

and appoint a new or additional administrator.310

307 Ibid. s 85(2).308 Ibid. ss 86-88.309 Ibid. s 89(1).310 Ibid. s 90. For an example of a private administrator being replaced by the Public Trustee on aperiodic review see, Re L (1999) 24 SR (WA) 173.

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8. 9. Australian Capital Territory8. 9. 1. Who has jurisdiction to appoint financial managers?As noted in relationship to guardianship in Chapter 6. 9. 1, the Supreme Courtof the Australian Capital Territory continues to have all original and appellatejurisdiction that is necessary to administer justice in the Territory, including itsinherent, parens patriae jurisdiction.311 However, it is not bound to exercise itspowers if it has concurrent jurisdiction with another court or tribunal.312

Although the Supreme Court may exercise its jurisdiction to appoint managers(the committee) of the property of an incapable person, this jurisdiction is moreconveniently and cost effectively exercised by the ACT Civil andAdministrative Tribunal (ACAT) which can appoint managers for the propertyof adults, namely persons 18 years of age or older.313 ACAT may also appointmanagers for persons less than 18 years of age, but such appointments do nottake effect until the person turns 18.314 In the light of these considerations, thischapter will deal only with the jurisdiction of ACAT.

8. 9. 2. Who may apply for a management order?The Guardianship and Management of Property Act 1991 (ACT) does not setout who may apply for a management order. The question of who may apply isdiscussed in Chapter 6. 9. 2.

In emergency situations, the Public Advocate will usually apply. Only thePublic Advocate or the Public Trustee can be appointed as a person’s managerin emergency circumstances.315 In most cases the Public Trustee would be theappropriate public official to appoint.

8. 9. 3. Who may take part in the hearing as a party?This matter is discussed in relation to applications for guardianship orders inChapter 6. 9. 3. If the person the application is about has a guardian, theyshould be given notice of the hearing.

8. 9. 4. What has to be proved before an order can be made?Before it may make a management order ACAT must be satisfied that:

1. the person has impaired decision-making ability in relation to theirfinancial matters or a matter affecting their property; and

2. there is, or is likely to be, a need for a decision in relation to the matter;or

311 Supreme Court Act 1933 (ACT) s 20. See also, Chapter 8. 9. 1.), A v Guardianship andManagement of Property Tribunal [1999] ACTSC 77, [69]-[70] and Public Trustee v Thompson [2000]ACTSC 4.312 Supreme Court Act 1933 (ACT) s 20(2).313 Guardianship and Management of Property Act 1991(ACT) ss 8 and 8A.314 Ibid. s 8C.315 Guardianship and Management of Property Act 1991(ACT) s 67.

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3. the person is likely to do something in relation to the matter thatinvolves, or is likely to involve, unreasonable risk to the person’s health,welfare or property; and

4. if a manager is not appointed the person’s needs will not be met; or theirinterests will be significantly adversely affected.

Impaired decision-making ability and the person’s interests have the samemeaning as set out in Chapter 6. 9. 3.

While a person’s impaired decision-making ability for management must arisefrom the same causes as for guardianship, the test for management requires anassessment of the person's level of understanding of their personal financialmatters or matters affecting their personal property. The test is subjective inthat sense and not a more objective “inability to make reasonable judgments”test that applies in Victoria, Tasmania and Western Australia.316

There is a specific restriction on ACAT’s power to appoint a manager forproperty in the Australian Capital Territory of someone who lives outside theTerritory. ACAT may appoint a manager in these circumstances only if it issatisfied that it is impracticable for a manager for the property to be appointedin the jurisdiction where the person with impaired decision-making ability livesor that an order appointing a manager for the property under the law of theother jurisdiction cannot be registered under Guardianship and Management ofProperty Act 1991 (ACT).317

8. 9. 5. Appointing a financial managerAny of the following may be appointed by ACAT as a manager of a person’sproperty in the Australian Capital Territory:

1. a private person 18 years or older,2. the Public Trustee,3. a trustee company, or4. the Public Advocate.318

However, the Public Trustee, a trustee company or the Public Advocate may beappointed must not be appointed as the manager if an individual who isotherwise suitable has consented to be appointed.319

The private person may also be the person’s guardian or joint guardian.320

Nevertheless, ACAT cannot consider a private person suitable for appointment

316 A v Guardianship and Management of Property Tribunal [1999] ACTSC 77, [60]-[61]. See also,Guardianship and Administration Act 1995 (Tas) s 51; Guardianship and Administration Act 1986(Vic) s 46 and Guardianship and Administration Act 1990 (WA) s 64.317 Guardianship and Management of Property Act 1991 (ACT) ss 8A and 12.318 Ibid. s 9(2).319 Ibid. s 9(5).320 Ibid. s 9(3).

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as manager unless it is satisfied that that person will follow the decision-making principles, has provided certain information on oath and ACAT hastaken into account a number of considerations.321 These matters are discussedin Chapter 6. 9. 4.

The decision-making principles to be followed are:

1. the wishes of the person whose property is under management, as far asthey can be worked out, must be given effect to, unless making adecision in accordance with those wishes is likely to significantlyadversely affect the person’s interests,

2. if giving effect to those wishes is likely to significantly adversely affectthe person’s interests—the manager must give effect to those wishes asfar as possible without significantly adversely affecting the person’sinterests,

3. if those wishes cannot be given effect to at all—the interests of theperson must be promoted,

4. the protected person’s life (including the person’s lifestyle) must beinterfered with to the smallest extent necessary,

5. those whose property is under management must be encouraged to lookafter themselves as far as possible,

6. those whose property is under management must be encouraged to livein the general community, and take part in community activities, as faras possible.322

Note, as suggested in Chapter 6. 9. 11, these principles require a manager toexercise “substituted judgment” and make decisions for the person whoseproperty is under management according to their wishes unless to do so wouldbe likely to significantly adversely affect the interests of that person. If theperson whose property is under management is able to express views, themanager must apply a form of substituted judgment. It is only if the personwhose property is under management is unable to express views that themanager is free to act as a substitute decision-maker and act in the way thatthey think is in the best interests of that person.

Whether acting as a maker of substituted judgment decisions or as a substitutedecision-maker, there is a further limitation on the manager. Before making adecision, the manager must consult with each carer of the person whoseproperty is under their management.323 However, the manager must not consultwith a carer if the consultation would, in the opinion of the manager, adverselyaffect the interests of the person whose property is under their management.324

321 Ibid. ss 4 and 8.322 Ibid s 4(2).323 The term “carer” is defined in the Guardianship and Management of Property Act 1991 (ACT) s 6.324 Ibid s 4(3) and (4).

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8. 9. 6. Joint/several/replacement managersPrivate persons may be appointed jointly as managers of the property of aperson found by ACAT to have relevant impaired decision-making ability.325

They will usually be required to act jointly only, but ACAT can specify thatthey may act severally in making decisions about the person’s property ifnecessary.

While there is no specific statutory provision for the appointment ofreplacement managers, ACAT has an implied power to do so. This is because itis required to conduct a review to consider the suitability of a person to be amanager as soon as practicable after the person becomes the replacementmanager.326

8. 9. 7. Types of management orders8. 9. 7. 1. Management orders in relation to all of the person’s propertyACAT may appoint a manager to manage all of the property of a person foundto have relevant impaired decision-making ability. ACAT may also give thatmanager all the powers it is satisfied are necessary or desirable to allow themanager to make decisions in relation to the property of the person, inaccordance with the decision-making principles.327 Nevertheless, theGuardianship and Management of Property Act 1991 (ACT) specificallyrequires that the powers given to a manager of a person’s property are to be nomore restrictive of the incapable person’s freedom of decision and action thanis necessary to achieve the purpose of the order.328

In practice most management orders are plenary in effect to ensure that themanager can mange all aspects of the property of the person with impaireddecision-making ability without having to return to ACAT to request extrapowers when unexpected matters arise.

8. 9. 7. 2. Orders with part of the estate excludedAs an alternative, ACAT may appoint a manager to manage only a stated partof the property of a person found to have relevant impaired decision-makingability. As with a manager of the whole of a person’s property, ACAT may alsogive that manager all the powers that are necessary or desirable to allow themanager to make decisions in relation to the property, but only those powersthat are no more restrictive of the incapable person’s freedom of decision andaction than is necessary to achieve the purpose of the order.

Although most management orders made by ACAT are plenary in nature andapply to all of the person’s financial matters and property, ACAT’s ability to

325 Ibid.326 Ibid s 19(3).327 Ibid. s 8(2).328 Ibid. s 11.

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make orders applying only to a stated part of the person’s property is consistentwith the least restrictive alternative provisions of the Act. In practice how itworks is for the Tribunal to include all of a person’s property in a managementorder, except for a clearly stated part of it. This approach is sometimes used toallow a person with limited ability to manage their property and financialaffairs to have control over their disability support pension or other socialsecurity income while an inheritance, a damages payment or other substantialsum and other related matters are managed on their behalf for their benefit andare protected against dissipation as a result of the importuning demands ofothers.

8. 9. 7. 3. Emergency management ordersACAT can make emergency management orders, lasting no longer than 10days, appointing the Public Trustee or the Public Advocate to be the managerof a person’s property, without holding a normal hearing. However, theTribunal must be satisfied that there are special circumstances of urgency thatmake it proper to do so.329

The question of the degree of proof required in relation to whether:

1. the person the hearing has impaired decision-making ability in relationto their financial matters or a matter affecting their property,

2. there is a need to make a decision about that matter, and if a manager isnot appointed, the person’s needs will not be met or their interests willbe significantly adversely affected,

has not been resolved in relation to emergency management orders. There is noindication in the legislation that it should be any less than proof on the civilstandard of the balance of probabilities. In any event, as the application isusually made by the Public Trustee or Public Advocate, it is accompanied byone or more doctor’s reports about the person’s decision-making ability andinformation, albeit often hearsay, about the other matters that ACAT has to besatisfied about, the information before ACAT usually meets the standard ofproof required.

Unlike in New South Wales, in the Australian Capital Territory there is noprovision for an interim financial management order pending furtherconsideration of the person’s capacity to manage their own affairs. Such aprovision allows a financial management order to be made where the currentand urgent need for the order is clear but, while there is an evidential basis forbelieving that the person is incapable, there is insufficient evidence to provethat matter on the balance of probabilities at the time the order needs to bemade.330 However, in the Australian Capital Territory there is power to seek aform of injunction to restrain dealings which has some of the same protectiveeffect. This is discussed in the next section, 8. 9. 8.

329 Ibid s 67.330 Guardianship Act 1987 (NSW) s 25H.

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8. 9. 8. Injunctions to restrain dealingsIn addition to its power to make emergency management orders for periods nolonger than 10 days, the Tribunal has the power, on the application of anotherperson, to make an order restraining a person from entering into, completing orregistering or otherwise giving effect to a transaction with someone else inrelation to the property of that other person. However, before it may do so,ACAT must be satisfied that there are grounds for making an appointment of amanager for the property of that person. ACAT does not have to be satisfied bythe evidence before it that an order can and should be made. However, it musthave before it material that provides an evidential basis for it to form a viewthat there are grounds for the appointment of a manager.331

Such an order can be made for a period of not more than three days. If, withinthat period, an application for the appointment of a manager is made to theTribunal, it may continue the restraining order until the application isdecided.332

8. 9. 9. Effect of a management orderThe accepted position when an administration order is made is that the powerof the person whose property is under management to deal with their propertyis suspended while the order is in force.333 However, while acceptance of thisposition is implied by the Guardianship and Management of Property Act 1991(ACT), that Act provides that if a person whose property is under managementpurports to enter into a transaction in relation to that property, the transaction isnot necessarily void on the ground that the person was not legally competent toenter into the transaction. The person’s guardian or manager or some otherperson involved in the transaction may, within 90 days after the date of thetransaction, apply to ACAT, the Supreme Court or the Magistrates Court.ACAT or either of those courts may by an order it considers just:

1. confirm the transaction; or2. declare the transaction void; or3. adjust the rights of the parties to the transaction.334

8. 9. 10. The role of Tribunal after making a management orderACAT’s role in relation to management orders is, as in most of the States, notconfined just to making and reviewing them. It may, on application, givedirections, an opinion or advice to a manager about the exercise of theirfunctions or powers.335

331 Guardianship and Management of Property Act 1991 (ACT) s 72(1).332 Ibid. s 72(2).333 David by her Tutor the Protective Commissioner v David (1993) 30 NSWLR 417.334 Guardianship and Management of Property Act 1991 (ACT) s 71.335 Ibid. ss 16 and 18.

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While managers must submit their accounts and other documents to the PublicTrustee in the Australian Capital Territory and the Public Trustee mustexamine those accounts and documents, it is the role of the Tribunal to disallowany items in the accounts.336

8. 9. 11. Powers and functions of a financial managerWhen ACAT appoints a manager to manage all or a part of a person’s property,it gives that manager all the powers it is satisfied are necessary or desirable toallow the manager to make decisions in relation to the property of the person,in accordance with the decision-making principles.337

Any act or omission of a manager acting under a management order orexecution of a document (instrument) by them has effect as if it were an act,omission or document of the person whose property they are managing.338 Amanager may also read the will of the person whose property they aremanaging, unless ACAT orders otherwise.339 This can help them in theirdecision-making in relation to the management of the person’s property.

The Guardianship and Management of Property Act 1991 (ACT) imposes thefollowing obligations on managers to:

1. act, as far as possible, as the person would have acted in thecircumstances if they did not have impaired decision-making ability,340

2. take into account the need to ensure that the person whose property isunder their management does not become destitute,341

3. take into account the desirability of maintaining, as nearly as possible,the lifestyle of the person as if the person did not have impaireddecision-making ability,342

4. exercise the power in the best interests of the person,343ensure that in theexercise of the power their own interests do not conflict with those ofthe protected person,344 and

5. ensure, unless ACAT orders otherwise, that their own property is keptseparate from that of the person whose property is under theirmanagement.345

336 Ibid. s 26. See also, clause 6 of the Guardianship and administration of Property Regulation 1991(ACT).337 Ibid. s 8(2).338 Ibid. ss 13 and 23.339 Ibid. s 20.340 Guardianship and Management of Property Act 1991 (ACT) s 4.341 Ibid. s 5A(e).342 Ibid. s 5A(c).343 Ibid. s 4(2) and the common law.344 Ibid. s 14(1)(a) and the common law.345 Ibid. s 14(1)(b) and (2).

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If the property the manager has been appointed to manage includes real estate,the manager must lodge a copy of the management order with the Registrar-General.346

If the person whose property is being managed receives interest or income fromthat property or money from the sale of it, or obtains other property, forexample as a bequest in a will or as a gift, whatever is received will bemanaged by the manager unless ACAT orders otherwise.347

A manager may only invest money that is part of the property they aremanaging in accordance with the requirements of the Trustee Act 1925 (ACT),unless ACAT permits otherwise in an order.348

Managers also have a discretion to pay out of the income or capital of aperson’s property they are managing, reasonable amounts for the maintenance,advancement or education, or otherwise for the benefit, of the person and theirdependants. In deciding whether to make a payment, the manager must takeinto account:

1. the views and wishes of the person whose property they are managing,2. the amount and nature of the property to be paid out for these purposes,3. the amount and nature of the person’s remaining property, and4. the present and likely future needs of the person and any dependants

they have.349

ACAT’s “Information for Managers” sets out the powers of managers theprinciples they should operate by and other matters, in further detail.350

On the anniversary of their appointment, managers must submit to the PublicTrustee their accounts and other documents relating to their management of theestates they are managing. 351 The Public Trustee must examine those accountsand other documents.352 There is no provision for the Public Trustee to reportto the tribunal, ACAT or the Supreme Court, that appointed them asadministrator.

8. 9. 12. Reviews of management ordersWhen the Tribunal appoints a manager, the appointment continues until:

346 Ibid. s 25.347 Ibid. S 22.348 Ibid. s 24.349 Ibid. s 21.350 See, www.acat.act.gov.au.351 Ibid. s 26. See also, clause 6 of the Guardianship and Administration of Property Regulation 1991(ACT).352 Guardianship and Management of Property Act 1991(ACT) s 27.

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1. the death of the person whose property is under management,353

2. ACAT removes the manager because it is satisfied that the manager isno longer suitable, competent, or has neglected to perform the duties andfunctions of manager, or has contravened a particular provision of theAct, or354

3. the manager resigns in writing given to ACAT.355

Nevertheless, ACAT must hold a review of (an inquiry into) each managementorder at least once every three years to see whether the order should be:

1. varied,2. revoked on the ground that it is no longer needed, or3. whether the manager should be removed.356

Such reviews may also be held as a result of an application or on ACAT’s owninitiative.357 Reviews must also be held if the manager dies or a replacementmanger, provided for in the management order, becomes the manager.358

8. 9. 13. Parties to reviews of management ordersThese reviews, whether periodic, requested or commenced on ACAT’s owninitiative, are conducted by way of hearing.359 Chapter 6. 9. 3 sets out thoseentitled to receive notice of and attend such hearings.

8. 9. 14. Powers of ACAT on reviewAfter conducting a hearing to review a management order, it may:

1. vary the order,2. revoke it on the ground that it is no longer needed, or3. remove and replace the manager if they are no longer suitable to be a

manager or no longer competent to exercise the functions or powers of amanager or have failed to exercise the functions or powers of a manager,or have contravened a provision of the Guardianship and Managementof Property Act 1991(ACT). 360

8. 10. Northern TerritoryAs both the Supreme Court and, in a more restricted way, the Local Court canmake administration orders in the Northern Territory, the provisions relevant toboth courts are set out in this part of the chapter.

353 Ibid. s 29.354 Ibid s 31.355 Ibid s 28.356 Ibid ss 19(2) and 31.357 Ibid s 19(1).358 Ibid s 19(3).359 Ibid. s 19(1) and (2).360 Ibid ss 19(1)and(2) and 31(1).

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8. 10. 1. Who has jurisdiction to appoint financial managers?8. 10. 1. 1. The Supreme Court’s statutory and parens patriae jurisdictionThe Supreme Court of the Northern Territory may make an administrationorder, known in the Northern Territory as a “protection order”, in relation to aperson who meets the criteria set out in the Aged and Infirm Persons’ PropertyAct 1979 (NT).361 This jurisdiction of the Supreme Court may be exercised by aMaster (Associate Justice) of the Court and not necessarily in open court but inchambers.362

The jurisdiction is in addition to any parens patriae jurisdiction that the Courthas. It is not intended to remove or reduce that jurisdiction.363 The SupremeCourt’s inherent jurisdiction, including its parens patriae jurisdiction, wasinherited from the Supreme Court of South Australia when the NorthernTerritory became a territory of the Commonwealth of Australia 1 January1911.364

In a 2006 case, Mildren J noted that the Aged and Infirm Persons’ Property Act1979 (NT) enabled the Supreme Court to make a protection order for the estateor part of the estate of a person. 365 It also enabled the Court to make such anorder of its own motion in any proceedings relating to the estate of any party tothose proceedings.366 He then continued:

The Court has wide powers to make such an order where the Court issatisfied that it is necessary in the interests of the person concerned thathis estate be protected. The Court, before making such an order, isrequired to take into account whether the person concerned is unable,wholly or partly, to manage his or her affairs or is subject to or liable tobe subject to undue influence in respect of his or her estate or thedisposition thereof. The Court may appoint the Public Trustee or anyoneelse whatsoever to be the manager of the estate and the order may bemade subject to such terms and conditions as the Court thinks fit.367

The Aged and Infirm Persons’ Property Act 1979 (NT) makes it clear that theSupreme Court’s jurisdiction can be exercised if the person the application isabout resides or is domiciled in the Territory; or, even if they are not resident ordomiciled in the Territory, the estate that is the subject of the proceedings issituated within the Territory.368

361 Aged and Infirm Persons’ Property Act 1979 (NT) ss 5, 11 and 12.362 Ibid. s 6.363 Ibid. s 5(1).364 Supreme Court Act (NT) 1979 s 14 and Equity Act 1866-7 (SA) s 7. See also, Colmer v O’Brien(1974) 9 SASR 378, 381.365 Renehan v Leeuwin Ocean Adventure Foundation Ltd [2006] NTSC 28 [46].366 Aged and Infirm Persons’ Property Act 1979 (NT) s 7(3).367 Ibid. ss 12(2), 13 and 16(1).368 Ibid. s 5.

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8. 10. 1. 2. The Local Court’s guardianship related jurisdictionIn practice however, because of the costs involved in seeking a protection orderin the Supreme Court, but more particularly because those who needguardianship orders often need administration orders as well, the question ofthe management of an incapable person’s estate is usually dealt with by theLocal Court. Nevertheless, the magistrates have no power to appoint someoneto manage the estate of an incapable person without first making a guardianshiporder in relation to that person.369 The Adult Guardianship Act 1988 (NT) givesjurisdiction to the Local Court, at the hearing of an application for aguardianship order, to appoint the guardian or the joint guardians to manage theestate of the person under guardianship.370

8. 10. 2. Who may apply for an administration order?8. 10. 2. 1. Application for a protection order in the Supreme CourtIf an application is made to the Supreme Court for a protection order, it may bemade by the following, without them first obtaining the leave of the Court:

1. the person in relation to whose estate the protection order is being sought,

2. a spouse or de facto partner of that person, a near relation by blood,marriage or de facto relationship of that person or an adopted child of thatperson, or

3. the Public Trustee.371

With the leave of the Court, any person may make an application for a protectionorder.372 Also, as already noted, the Court may, of its own motion, and in anyproceedings, make a protection order.373

8. 10. 2. 2. Management orders in the Local CourtAs the Local Court can appoint as managers only those guardians it hasappointed, there is no separate provision about who may apply for such orders.Consequently, those who may apply for a guardianship order may also indicatethat they are seeking a management order when they make their application for aguardianship order. The people who may apply, and the process that iscommenced by the making of an application , are set out in Chapter 6.10. 2 and 6.10. 3.

8. 10. 3. Who may take part in the hearing as a party?For matters being dealt with by the Local Court under the Adult Guardianship Act1988 (NT), see Chapter 6. 10. 4.

369 Adult Guardianship Act 1988 (NT) s 16.370 Ibid. s 16(1)(a).371 Aged and Infirm Persons’ Property Act 1979 (NT) s 7(1).372 Ibid. s 7(2).373 Ibid. s 7(3).

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For matters being dealt with by the Supreme Court under the Aged and InfirmPersons’ Property Act 1979 (NT), notice of the application made to the Courtor the intention of the Court to make a protection order of its own motion mustbe served the personally on the person to whose estate is the subject of theapplication or proceedings and on such other persons as the Court may direct.However, the Court may if it is satisfied that special circumstances exist, directthat service of notice not be carried out and may hear or determine any suchproceedings as though such service had been carried out.374

When conducting proceedings under this Act, the Supreme Court has a widediscretion as to how it goes about this. It may examine personally the personwhose estate the proceedings are about in any manner which it thinks fit eitherwith or without the attendance of any other person.375 Additionally oralternatively, it may order an investigation and report.376

8. 10. 4. What has to be proved before an order can be made?For matters being dealt with by the Local Court under the Adult Guardianship Act1988 (NT), this is set out in Chapter 6.10. 5.

For matters being dealt with by the Supreme Court under the Aged and InfirmPersons’ Property Act 1979 (NT), the Court must not make a protection orderunless it is satisfied that the person whose estate is the subject of theproceedings is:

1. by reason of age, disease, illness or mental or physical infirmity in aposition which renders it necessary in their interests or in the interests ofthose dependent on them that their estate be protected, and

2. in determining whether the person’s estate should be protected, to takeinto account whether the person is wholly or partly unable to managetheir affairs or is subject to or liable to be subject to undue influenceconcerning their estate or the disposition of it. 377

When the Supreme Court makes a protection order under the Act, it may makethe order subject to such terms and conditions as it thinks fit.378

8. 10. 5. Appointing a managerBefore it may appoint the guardian of the person to also manage their estate,the Local Court has to be satisfied that the guardian is competent to manage theperson’s estate. The Court may make the order subject to such terms andconditions as it thinks fit.379 Such management orders are very common. A

374 Aged and Infirm Persons’ Property Act 1979 (NT) s 8.375 Ibid. s 9.376 Ibid. s 8.377 Ibid. s 12.378 Ibid. s 16(1). A list of the matters that can be included in those terms and conditions are set out in s16(2).379 Adult Guardianship Act 1988 (NT) s 16(1)(a).

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survey conducted in 2005 showed that more than 90% of those subject toguardianship orders in the Northern Territory also had their guardian appointedas manager of their estate. The Public Guardian is regularly appointed managerin these circumstances.

However, if the Court is not satisfied that the guardian is competent to managethe person’s estate, it cannot appoint another person to act in their place.Instead, it may order that the Public Trustee or some other person make anapplication under the Aged and Infirm Persons’ Property Act 1979 (NT) to theSupreme Court for a protection order.380

When the Supreme Court is appointing a manager under the Act, it may appointeither the Public Trustee alone or one or more private persons.381

8. 10. 6. Joint/several/alternate financial managersWhen the Supreme Court is appointing managers under the Aged and InfirmPersons’ Property Act 1979 (NT), there is no provision for alternate managersor managers to act severally. The Act specifically provides that where morethan one manager has been appointed, all the managers of the estate mustconcur in every act, matter and thing done in relation to the estate by anymanager of the estate.382 This provision counsels in favour of having only oneand no more than two managers.

8. 10. 7. Types of financial management orders8. 10. 7. 1. Plenary ordersThe effect of the Aged and Infirm Persons’ Property Act 1979 (NT) is to allowthe Supreme Court to make a protection order covering the whole of a person’sestate for the whole of their life. So the Court may make plenary orders.However it may also make the order in relation to part only of the person’sestate and subject to such terms and conditions it thinks fit. It may also vary orrescind a protection order.383 Consequently, the Court has considerablediscretion about the extent of the person’s estate to be covered, the longevity ofthe order and its terms and conditions, including the power to give the personwhose estate is being protected leave to deal with all or part of their estate.

On the other hand, management orders made by the Local Court appear to beplenary in power and to cover all of the person’s estate. However, the LocalCourt may vary or terminate a management order at any time.384

8. 10. 7. 2. Orders in relation to part only of the person’s estate

380 Ibid. s 16(1)(b).381 Aged and Infirm Persons’ Property Act 1979 (NT) s 13.382 Ibid. s 19.383 Ibid. ss 11, 15,16 and 20.384 Adult Guardianship Act 1988 (NT) s 16(2A).

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As already noted, the Supreme Court may make protection orders covering partonly of a person’s estate.385 The Local Court does not appear to have this powerwhen it appoints a guardian as the manager of the estate of the person undertheir guardianship.

8. 10. 7. 3. Interim ordersThe Supreme Court does not have power under the Aged and Infirm Persons’Property Act 1979 (NT) to make interim protection orders pending furtherconsideration of a person’s capacity to manage their own affairs. However, theCourt would be able to exercise its powers to issue interim injunctions or otherorders to protect a person’s property pending its decision whether or not tomake a protection order.

The Local Court does not appear to have this power when deciding whether toappoint a guardian as the manager of the estate of the person under theirguardianship.

8. 10. 8. Powers and functions of a financial managerBoth the manager of an estate appointed under protection order by the SupremeCourt and the guardian appointed also as the manager of the estate of theperson under their guardianship by the Local Court have the same powers andliabilities of a manager.386 These powers and liabilities are set out in the Agedand Infirm Persons’ Property Act 1979 (NT).387 In addition to its powers underthat Act, the Supreme Court has been willing to rely on its parens patriaejurisdiction to order that an award to a woman with an intellectual disability,who needed her estate to be protected, be held in trust and to appoint someoneoutside the jurisdiction (the Public Trustee of Western Australia) to act astrustee.388

A guardian appointed as a manager is required, at least once a year, to give theExecutive Officer an account of the management of the person's estate,showing assets and liabilities and receipts and payments in relation to theestate. The Executive Officer is required to report on the management of theestate to the Local Court at the time the guardianship order is reviewed.389

8. 10. 9. Effect of a protection order or management order8. 10. 9. 1. Protection orders made by the Supreme CourtA protection order made under the Aged and Infirm Persons’ Property Act1979 (NT) renders the person the order applies to incapable of dealing with anypart of their estate that is covered by the order, for example by charging orotherwise disposing of it. However, the person can buy necessaries or deal with

385 Aged and Infirm Persons’ Property Act 1979 (NT) s 11.386 Adult Guardianship Act 1988 (NT) s 16(2).387 Aged and Infirm Persons’ Property Act 1979 (NT) ss 17 and 21.388 Renehan v Leeuwin Ocean Adventure Foundation Ltd [2006] NTSC 28.389 Adult Guardianship Act 1988 (NT) s 16(3) and (4).

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their estate with the leave of the Supreme Court. Any other transaction will bevoid, of no effect and unenforceable unless the transaction was for valuableconsideration and the other party to it acted in good faith and without actualnotice of the protection order.390

8. 10. 9. 2. Management orders made by the Local CourtThe Adult Guardianship Act 1988 (NT) is silent on the effect of a managementon the capacity of the person the subject of the order dealing with theirfinancial affairs and property. However, the common law position is that thepower of a person whose financial affairs are placed under administration todeal with their estate is suspended for the duration of the order.391

8. 10. 10. Reviews of financial management ordersBecause the Executive Officer is required to report to the Local Court on themanagement of the estate at the review of the guardianship order in relation tothe person, management orders made by the Local Court are, in effect,reviewed at least every two years.392 At such a review, the Court may vary orterminate the appointment of a guardian as the manager of the estate of theperson under their guardianship.393

8. 10. 10. 1. Requested reviewsApplications to vary or revoke protection orders made by the Supreme Courtunder the Aged and Infirm Persons’ Property Act 1979 (NT) can be made bythe same people, subject to the same limitations, as can make applications forsuch orders.394 Those may attend and take part in the hearing are the same asthose who may have taken part in the original hearing.395 Such reviews can alsobe undertaken, on its own motion by the Supreme Court.

The Local Court may, at any time, vary or terminate the appointment of aguardian as the manager of the estate of the person under their guardianship.396

However, as there is no process for initiating such an application, anapplication would have to be made to review the guardianship order uponwhich the management order is based.397 Those able to take part in the reviewof the guardianship order would be entitled to notice of, and to attend, such arequested review.398

8. 11. General matters8. 11. 1. Purpose of administration orders

390 Aged and Infirm Persons’ Property Act 1979 (NT) s 20.391 David by her Tutor the Protective Commissioner v David (1993) 30 NSWLR 417 (1993) 30NSWLR 417.392 Adult Guardianship Act 1988 (NT) s 23(1).393 Ibid. s 16(2A).394 See, 8. 8. 2. 1. and Aged and Infirm Persons’ Property Act 1979 (NT) s 7.395 See 8. 8. 3.396 Adult Guardianship Act 1988 (NT) s 16(2A).397 Adult Guardianship Act 1988 (NT) s 23.398 See Ch 8. 8. 8.

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It is well established in the common law and has been restated a number oftimes in Australia in the late 20th century that administration orders are to bemade only where it is desirable to do so for the benefit of the person with thedecision-making disability and not for the benefit of others.399 Even then thereis a discretion as to whether or not to make the order.400 Administration ordersare also to be made to protect those incapable of managing their property andaffairs from exploitation.401

The High Court has noted there will be cases in which a person who has lostcapacity because of the injuries they have received through proven or admittednegligence will receive an award of damages to compensate them for lossespast, present and future caused by that negligence. Where such a person willnever be able to manage their financial affairs they will need an administrator.That administrator will have to invest the damages and act with reasonablediligence. Consequently, they will incur expenses in performing those tasks.Because the incurring of those expenses is a direct result of the negligence, thedamages to be awarded to place the person, so far as possible, in the positionthey would have been in if the tort had not been committed will include anamount assessed as providing for the remuneration and expenditures properlycharged or incurred by the administrator of the fund during the intended life ofthe fund.402

8. 11. 2. Who may apply for an orderThe legislation in all States and the Northern Territory sets out who may applyfor an administration order and who may apply for its review or revocation.Sometimes there will be no family members or friends either at all or anyprepared to make the application for an administration order. Sometimes familymembers or “new found friends” of incapable people will be exploiting themfinancially and this may only come to light through accident or the observationof others not related to the incapable person. Consequently, it is necessary inthe best interests of incapable people for there to be a range of people who canapply for administration orders on their behalf.

Where a person in this position has a solicitor, the New South WalesGuardianship Tribunal has been willing to accept an application from thesolicitor as a person who has a genuine concern for the person the application isabout. This practise has been beneficial to some who need administrationorders, but it should be used with caution, and avoided altogether if it is knownthat the incapable person opposes such an application or there is possibility thatthey will recover their capacity to such an extent that they may be able to

399 M v M [1981] 2 NSWLR 334; XYZ v State Trustee [2004] NSWSC 444 ; RAP v AEP [1982] 2NSWLR 508 and Re R (2000) NSWSC 886 [35]-[37]..400 M v M [1981] 2 NSWLR 334, 336.401 PY v RJS [1982] 2 NSWLR 700 and Re R [2000] NSWSC 886, [51].402 Willett v Futcher [2005] HCA 47 [49] and [51]. See also Smith v Hanrahan [2006] WADC 20, 42SR (WA) 268.

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appreciate that their affairs are under management and that that was somethingthey did not want.

In a 1993 case, Powell J observed that it was undesirable that a solicitor shouldput themselves in an adversary position with their clients if their conditionscould be cured or controlled and they might wish to oppose the order.403

However, he went on to acknowledge that there may be occasions when therewas no one other than the incapable person’s own solicitor who was eitherwilling or able to commence proceedings for the appointment of anadministrator. Nevertheless, he went on to suggest that the preferable course inthese circumstances was for the solicitor to invoke the good offices of a friendof the client, or even of one of the trustee companies and have them bring theapplication.404

8. 11. 3. Who should have notice of the hearing of the application?The legislation in most States and the two Territories sets out who should begiven notice of the hearing of the application and be able to attend. However, in1846 Lord Eldon noted:

Those to whom the Crown has confided the exercise of this jurisdictionhave thought, and in my judgment they have rightly thought, that it isgreatly to the advantage of lunatics, generally speaking, that all the nextof kin and the heir at law should be present when the proposals forcommittees of the estate and of the person are discussed. In theirabsence many cases would be decided in total ignorance of, or only witha partial and imperfect acquaintance with, those circumstances athorough knowledge of which is necessary to enable the LordChancellor to determine whether the plans he is required to sanction,will be beneficial, or detrimental, to the unfortunate persons on whoseaccount they are framed.405

8. 11. 4. Tests for making administration ordersIn all States and Territories of Australia there are statutory criteria that must besatisfied before the various courts and tribunals which have jurisdiction tomake administration orders may make such orders. They all require the proofof “incapacity”- a term which is given different names in the different Acts.

8. 11. 5. The incapacity criterionThe test set out in the New South Wales Supreme Court case PY v RJS is seenas of great assistance in determining whether the statutory “incapacity”criterion has been met.406 The test has been repeatedly applied in New SouthWales both in terms of determining whether a financial management order

403 McD v McD [1983] 3 NSWLR 81, 84.404 Ibid.405 Re Meux (1846) 47 ER 1075.406 [1982] 2 NSWLR 700.

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should be made or whether, on review, the order should remain in place or berevoked.407 In PY v RJS Powell J, explaining why he was not going to make anadministration order in relation to a man with schizophrenia, said:

[A] person is not shown to be incapable of managing hisor her own affairs unless, at the least, it appears:

(a) that he or she appears incapable of dealing, in a reasonablycompetent fashion, with the ordinary routine affairs of people; and

(b) that, by reason of that lack of competence there is shown to bea real risk that either:

(i) he or she may be disadvantaged in the conduct of suchaffairs; or

(ii) that such moneys or property which he or she may possessmay be dissipated or lost;

it is not sufficient, in my view, merely to demonstrate that the personlacks the high level of ability needed to deal with complicatedtransactions or that he or she does not deal with even simple or routinetransactions in the most efficient manner.408

Like the man in PY v RJS, others have difficult lives living in ways that most ofus could not tolerate, but that does not mean that they have lost capacity tomanage their financial affairs. Ms W was essentially homeless and relied onothers to provide her with accommodation over night. By the end of most daysshe was intoxicated and sometimes she had her money stolen and sometimesshe was assaulted. Others, who had through their actions long proven that theyhad a genuine concern for their welfare, applied to the New South WalesGuardianship Tribunal for an administration order in relation to her. Sherefused to come to the hearing. The only evidence about her capacity was amini-mental state examination in which she scored 28 out of 30. Otherevidence showed that she actively chose to spend most of her income onalcohol and that she was able to obtain accommodation. As the Tribunal wasnot satisfied that she had lost her capacity, did not make an order in relation toher.409

In another case in which the Tribunal was not satisfied that a person had losttheir capacity to manage their financial affairs, a husband was unable to dealwith the divorce proceedings brought by his wife to end their marriage. He wasable to continue to run his business. While he was not dealing with one

407 Re GHI [2005] NSWSC 581, [5]. See also, CF v TCML [1983] 1 NSWLR 138, M and theProtected Estates Act (1988) 12 NSWLR 96, and Re C (TH) and the Protected Estates Act [1999]NSWSC 456.408 [1982] 2 NSWLR 700, 702.409 Matter No. 2000/591 (unreported, Guardianship Tribunal, 15 February 2000).

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important aspect of his financial affairs, the evidence did not show that he hadlost his capacity to manage his financial affairs and the Tribunal dismissed theapplication for an administration order in relation to him.410 It should be notedhowever that in Queensland at least where the incapacity may relate to aparticular financial matter, it may be possible to make an administration orderonly in relation to that particular financial matter if impaired capacity for thatmatter is proved.411

In dealing with the test for making an administration order in the SupremeCourt of New South Wales, Porter and Robinson have noted that:

It is very significant that the section does not limit the nature of thedisability and therefore an order could be made in the case of someonewho has become incapable of communicating because of quadriplegiathrough trauma, but whose cognitive or reasoning abilities could remainquite unimpaired.412

There has been an apparent difference of view between the Supreme Courts ofNew South Wales and Victoria about whether the proper test for capacity is the“objective” test of Powell J in PY v RJS or a more “subjective” test adopted inVictoria in which capacity is seen as more related to the personal circumstancesof the person the application is about.413 As Cavanough J of the SupremeCourt of Victoria noted in a 2006 case, under the subjective test it wasnecessary to measure the person’s ability against their actual property andaffairs however extensive, complex or demanding they may be, rather thanagainst an objective standard such as “the ordinary routine affairs of man” (theNew South Wales test).414 Cavanough J noted that the Victorian provisionapplicable to a broader range of persons than the equivalent New South Walesprovision; however he took the view that the proper tribunal to deal withapplications in Victoria was VCAT, and sent the matter back to it to decide.415

Cavanough J shared the concerns of other Supreme Court and Court of Appealjudges in Victoria about the reach of the Victorian provision. He referredspecifically to 1982 report upon which the Victorian Parliament relied inframing the Guardianship and Administration Act 1986 (Vic) quoting part ofthe report that a determination that a person was incapable of managing theirfinancial affairs should not operate to mean that:

410 Matter No. 1999/4274 (unreported, Guardianship Tribunal, 10 March 2000). This case and theprevious one are in contrast to Matter No. 2000/909 (unreported, Guardianship Tribunal, 10 March2000).411 Guardianship and Administration Act 2000 (Qld) s 12 and Schedule 2 Part 1.412 Porter and Robinson op cit (footnote 10), 40.413 Re McGregor [1985] VR 861.414 XYZ v State Trustees Ltd [2006] VSC 444, [69].415 Ibid. [70], [72] and [73].

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[A] bad investor or unsuccessful entrepreneur should not lose control ofhis estate, nor should the person who simply lacks an interest in moneymatters be the subject of an estate administration order. It is the personwhose capacity is lacking or is severely impaired who may be in need ofthis type of protection. (Cavanough J’s emphasis)416

He also referred to the 1992 Victorian Court of Appeal case which noted thatthe authority that may be conferred on an administrator under the Victorian Acteffectively commits to the administrator total control over the property of theperson the order was about, but that control and its extent may be limited byvirtue of the extent of the powers and duties given to the administrator in theorder made by VCAT.417 The Court of Appeal went on to comment that whilethere would be cases in which the jurisdiction of [now VCAT] may bejustifiably invoked, administration orders “are calculated to achieve, at theinstance of any person at all, a far-reaching deprivation of the freedom ofaction not only of represented persons but of near relatives of such persons.”418

The Court also noted that the Guardianship and Administration Act 1986 (Vic)prescribed very important safeguards against the making of inappropriateadministration orders. These included the requirement that VCAT’sjurisdiction be exercised so that its orders were the least restrictive of thefreedom of decision and action of the person the order was about as waspossible in the circumstances, that the best interests of that person werepromoted and their wishes were given effect to wherever possible.419

When the matter was reheard in VCAT, the Deputy President in charge of theGuardianship List, J.C. Billings, made a number of helpful, general remarksabout administration orders before going on to discuss whether the test forcapacity was subjective or objective.420 He said:

If it were open but also necessary for me to choose between theseVictorian and New South Wales decisions, I would respectfully preferRe McGregor for the reasons set out in that case.421 However, section46(a)(ii) of the Guardianship and Administration Act 1986 (Vic)contains further words that really distinguish these cases and reinforcethe subjective nature of the test. Those words are “all or any part of heror his estate” (emphasis added). This surely involves the Tribunal

416 Ibid. [72].417 Guardianship and Administration Act 1986 (Vic) s 48 and McDonald v Guardianship andAdministration Board [1993] 1 VR 521, 530-531.418 McDonald v Guardianship and Administration Board [1993] 1 VR 521, 530.419 Guardianship and Administration Act 1986 (Vic) s 4(2) and McDonald v Guardianship andAdministration Board [1993] 1 VR 521, 530-531420 XYZ [2007] VCAT 1196, [47] – [51]. See also his discussion of the degree of capacity required andcapacity assessments [60]-[70].421 [1985] VR 861.

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considering the person’s capacity in relation to his or her actual estateand not “ordinary routine affairs”.422

Billings DP went on to note that the issue whether the subjective or objectivetest was applied was important in the context of the legislation beinginterpreted in the New South Wales cases, because it was considered thatapplying the subjective test would make it more difficult for a person toestablish that they were now capable and so able to resume management oftheir own affairs. However, he also suggested that the need to resolve the issuein terms of the Victorian Act was not so strong because a person who hadcapacity in relation to that part of their estate comprising ordinary routineaffairs but who lacked capacity in relation to certain complex aspects of theirestate could, “depending on ‘need’ and the other usual matters”, be made thesubject of an administration order limiting the administrator’s power tomanaging only the complex part of the estate.423

In support of the New South Wales objective test, Campbell J referred to theconcerns about the subjective test expressed by Powell J. In a 1988 case,predating the establishment of the Guardianship Tribunal, Powell J said:

I find myself unable to accept that the intention of the Parliament, asexpressed in the Protected Estates Act 1983(NSW), was that a personwho does not suffer from mental illness, mental infirmity, mentalretardation or some other like condition, but who, although otherwisecapable of leading a normal life and managing his affairs, is, for somereason, as, for example, a limited education, incapable of managing oradministering a large or complex estate which may fortuitously come hisway, should be liable to be deprived by the Court of all power tomanage his life and affairs.424

In a 1999 case Young J expressed a similar view. He noted that the subjectivetest was whether the alleged incapable person was able to manage their ownaffairs as they exist in actuality, and continued:

Accordingly, a multi-millionaire with complex affairs would be morelikely to be declared an incapable person than a pensioner living in aretirement village without any property interests.425

In the same case Young J suggested that it was easier for an “alleged incapableperson” to be found to be still capable under the New South Wales “objective”

422 XYZ [2007] VCAT 1196, [55].423 Ibid. [56]. See also, Guardianship and Administration Act 1986 (Vic) s 48.424 M and the Protected Estates Act (1988) 12 NSWLR 96, 102.425 EMG v Guardianship and Administration Board of Victoria [1999] NSWSC 501, [46].

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test than under the Victorian “subjective” test.426 He also noted that the“ordinary routine affairs of people” encompass matters such as “dealings withone’s home and the issues relating to health insurance, pensions and choice offinancial advisers” and that for the “alleged incapable person” to be reasonablycompetent as required under the PY v RJS test, they would need to be able to:

1. either personally carry out these tasks, or2. be reasonably discerning in their choice of assistance, which assistance

might be from a family member and/or professional advisers, and3. be reasonably discerning in their capacity to evaluate the advice from

such assistance.427

In reality, and partly because of the cautions expressed by the judges of theSupreme Court of Victoria and the “glosses” on the PY v RJS made by judgesof the Supreme Court of New South Wales set out below, the differencebetween the two tests in terms of the evidence considered by the court ortribunal determining particular cases, and the decisions they reach on the factsof those cases, may not be very great.428

In an unreported 1997 case Hodgson J commenting on the test in PY v RJSagreed with Powell J that the first element of the test namely that because ofthe lack of competence of the person the hearing is about there is a real risk thatthey may be disadvantaged in the conduct of their financial affairs, has to bejudged without reference to the difficulty or complexity of the person’s affairs,but he continued:

I do not think [Powell J’s] view, however, means that the complexityand difficulty of the person’s affairs cannot be taken into account inassessing the risk which has to be considered under the second element;and, of course, there is no reason why that aspect, that is the complexityand difficulty of the person’s affairs, should not be taken into account inany element of discretion that the Court may have.429

In a 2000 case in which Young J was not satisfied that a man, who had hadserious head injuries for which he had received substantial damages, hadrecovered his capacity to manage his own affairs, he said:

[T]he ordinary affairs of mankind do not just mean being able to go tothe bank and draw out housekeeping money. Most people’s affairs aremore complicated than that, and the ordinary affairs of mankind involve

426 Ibid. [46].427 Ibid. [50].428 As to the position in England and Wales see, Masterman-Lister v Brutton & Co [2002] EWCA Civ1889 [18] and [19].429 N v N (unreported, NSW Supreme Court, Hodgson J, 13 March 1997) 4, quoted in, Re GH1 (2005)221 ALR 589, [8].

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at least planning for the future, working out how one will feed oneselfand ones family, and how one is going to generate income and look aftercapital. Accordingly, whilst one does not have to be a person who iscapable of managing complex financial affairs, one has to go beyondjust managing household bills.430

In Queensland, QCAT must be satisfied that the adult person the hearing isabout has impaired capacity for a financial matter, among other things, before itmay make an administration order.431 The Guardianship and AdministrationAct 2000 (Qld) contains a long list of financial matters.432 While mostadministration orders made in Queensland cover all aspects of the property andfinancial affairs of the person the order is about, the test for capacity issubjective in nature.

Whether or not a person the subject of an application meets the criteria formaking an administration order is not restricted to a consideration of thematters as the stand on the day of the hearing. The court or tribunal hearing thematter is “both entitled and required to consider what the position will be in thereasonably foreseeable future”.433

8. 11. 6. Deciding the incapacity issueIn most cases, the incapacity of the person the hearing is about will be beyondquestion and not in contention. Nevertheless, the court or tribunal will need tohave before it some medical or other appropriate evidence to satisfy it that theperson has sufficient incapacity for it to be able to proceed to consider the othercriteria it must be satisfied about before deciding whether or not to make anorder. The evidence of those lay to medicine, particularly about what theperson can and cannot do in terms of attending to their financial affairs andavoiding the blandishments of others and other risks, can be very important onthis matter. This was hinted at by Cavanough J in XYZ v State Trustees Ltdwhen he also noted that VCAT had gone beyond the legitimate use of expertevidence and had inappropriately delegated to the expert the responsibility thatlay with it to decide the capacity issue.434

Billings DP took up the matter of capacity assessment in the XYZ Case when itcame back to VCAT for rehearing and, in doing so, noted the claim that itneuropsychological examinations have moderately good success in predictingmoney management ability and performance on an important component ofinstrumental activity of daily living in the form of automated machine usage,but may fall down on other quality of life type issues.435

430 H v H (unreported, NSW Supreme Court, Young J, 20 March 2000), 7-8.431 Guardianship and Administration Act 2000 (Qld) s 12(1).432 Ibid. Schedule, 2 s 1.433 McD v McD [1983] 3 NSWLR 81, 86.434 [2006] VSC 444, [55]-[58].435 [2007] VCAT 1196, [66].

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As a 2006 decision from the Tasmanian Guardianship and AdministrationBoard shows, getting into serious financial difficulties because of drinking andgambling addictions will not necessarily prove incapacity and inability to makereasonable financial judgments. In that case the medical evidence indicated thatany incapacity that the person the hearing was about had was likely to be due toalcohol use rather than being due to dementia or brain injury. If the personwere to stop drinking altogether, then it would be likely that there would bevery little residual incapacity and that the person would “be able to attend to allnormal functions at all times”.436 On the disability issue the Board stated:

The Board was not satisfied that when [the person the hearing wasabout] is sober, he is a person with a disability; that is the Board did notreceive any conclusive evidence that [the person] has experienced anyabsence, loss or abnormality of mental, psychological, physiological oranatomical structure or function. Even if we were satisfied that theremay be an underlying depression or early stage brain damage, we couldnot be satisfied that by reason of that disability he is incapable ofmaking reasonable financial judgments.437

8. 11. 7. The need criterionIn four States, New South Wales, Victoria, Tasmania and Western Australia,the tribunal or court making the order has to be satisfied that the person thehearing is about is in need of another person to manage their financial affairsbefore it may make an administration order in relation to that person.438

As already noted, Cavanough J of the Victorian Supreme Court has stated that,generally speaking, the question of “need” is answered primarily by referenceto the availability or otherwise of alternative arrangements outsideadministration (such as family support) to compensate for or deal with theperson’s identified “inability”.439

On the question of the need for an administrator criterion and the leastrestrictive alternative criterion, Underwood J of the Tasmanian Supreme Courtnoted in a 1998 case that once it was established that the person the hearingwas about was under a disability and because of that was unable to makereasonable judgments about matters relating to all or part of their estate, itwould almost invariably follow that there was a need for an administrationorder. However, because Parliament had directed the Tasmanian Guardianshipand Administration Board to consider, not only the need for an administrator to

436 XT (Admin) 6.3.06 [13] at www.guardianship.tas.gov.au/decisions.437 Ibid. [16].438 Guardianship Act 1987 (NSW) s 25G(b) for the Guardianship Tribunal, Guardianship andAdministration Act 1986 (Vic) s 46(1)(a)(iii), Guardianship and Administration Act 1995 (Tas) s51(1)(3)(c), Guardianship and Administration Act 1990 (WA) s 64(1)(b).439 XYZ v State Trustees Ltd [2006] VSC 444, [44]-[45]

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manage and protect the estate, but also all the other needs of the person thehearing was about, if after having done this, the Board reached the view that allthe person’s needs could be satisfied by means less restrictive of their freedomof action and decision than would be the case if an administration order wasmade, then an administration order should not be made. Underwood Jcommented that his construction reflected the philosophy apparent in theGuardianship and Administration Act 1995 (Tas) namely that control over andrestriction on a person under a disability is to be kept to a minimum.440

Underwood J’s approach was followed in Western Australia in 2001 in a casedecided by a panel the then Guardianship and Administration Board of WesternAustralia which included its president and deputy president.441 However, theWestern Australian Board expanded on Underwood J’s views. They noted thatwhile the need for an administrator (or guardian) would usually follow from theexistence of disability, they stressed that the mere fact that a person has adisability that makes them unable to make reasonable decisions does notautomatically mean that they are “in need of an administrator” (or guardian).The person may have no assets that require administration or their assets maybe in a joint account which their spouse can access and use for the person’sbenefit. Their pension may be sent by Centrelink to a nominee to use for theperson’s benefit. The person may have appointed an attorney under an enduringpower of attorney while they were still capable or a formal trust or court ordermay be in existence, avoiding the need to appoint an administrator.442

The Western Australian Board also noted that the phrase "needs of the person"in the Guardianship and Administration Act 1990 (WA) was the same as thatterm in the Tasmanian Act as interpreted by Underwood J, but took the matterfurther.443 That Board noted that the term “needs of the person” was of wideimport and encompassed all the wants and necessaries of the person. The Boardalso noted that there was a two step process. The tribunal deciding the matterhad first to determine whether there was a need for an administrator (orguardian) and then move on to the issue of whether, notwithstanding theabsence of any formal legal authority to deal with the affairs of the person, theneeds of that person could, nevertheless, be met under informal arrangementswhich were less restrictive of the person's freedom of decision and action.444

The Board continued:

The first step is the question whether the basic requirements for makingan order have been satisfied, that is, whether an order could be made on

440 Public Trustee v Blackwood (1998) 8 Tas SR 256,265. See also ss 6, 51 and 57 of the Guardianshipand Administration Act 1995 (Tas).441 MM [2001] WAGAB 2, (2001) 28 SR (WA) 320, 329.442 Ibid. [54] and [55].443 See, Guardianship and Administration Act 1990 (WA) s 4(c) and Guardianship and AdministrationAct 1995 (Tas) s 51(2).444 MM [2001] WAGAB 2 [55], (2001) SR (WA) 320, 330. For an example of this see Re DAP (1994)13 SR (WA) 21.

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the facts of the particular case. The second … is the question whetherthere is any alternative to making an order, that is, whether an ordershould be made.445

It is suggested that the same approach applies as a result of the legislativeprovisions and common law applicable in the other States and Territories ofAustralia.

It is the established practice of the New South Wales Guardianship Tribunalthat if there are currently satisfactory informal arrangements in place for themanagement of an incapable person’s estate and these are continuing to operateand will be able to continue to operate into the foreseeable future, then therewill be no need to make an administration order. Young J supported theapproach of the Tribunal in a case in which he noted that when a tribunal or acourt is exercising its discretion as to whether or not to make an administrationorder, it should bear in mind that ordinarily members of the communityconsider that (the appointment of a family member as administrator) or theappointment of an outside manager is a measure of last resort.446

The recent reform of powers of attorney legislation in some Australian States,particularly in relation to enduring powers of attorney, had as one of its goalsthe encouragement of people to make enduring powers of attorney inanticipation of a time when they might lose their decision-making capacityeither temporarily or permanently. By appointing an attorney under anenduring power of attorney, the appointor (sometimes called the principal orthe donor) has the dignity of appointing the person they want to manage theirfinancial affairs when they are incapable of or no longer wish to manage thoseaffairs.447 While this will work well in most cases, there will be occasionaldifficulties. Enduring powers of attorney are discussed in Chapter 10.

However, as Cohen J of the Supreme Court of New South Wales pointed out ina 1998 case, that where a now incapable person’s solicitor is also their attorney,it is difficult not to have a conflict of interest. One difficulty is that the solicitorwould have no one who could give them instructions about their charges andno one would be able to authorise the payment of the fees which they mightcharge. Cohen J considered the “checklist of considerations” summarisedbelow at 8. 11. 13, particularly the advantage of appointing the now NSWTrustee in these circumstances. He declared the appointor incapable ofmanaging her affairs, ordered that her estate be subject to management underthe since repealed Protected Estates Act 1983 (NSW) and ordered that the thenProtective Commissioner (now NSW Trustee) be appointed manager of her

445 Ibid.446 Re R [2000] NSWSC 866 [32].447 For an example of this approach being upheld, but expressed in terms of “the least restrictivealternative” see, EW [2010] WASAT 91.

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estate.448 In relation to the appointment of professionals as attorneys underenduring powers of attorney he stated, in particular, that:

In any event I think a professional person who becomes an attorney isput in a very difficult or even impossible situation.449

In Queensland and the Australian Capital Territory the need criterion isexpressed as the needs of the incapable person not being met without theappointment of an administrator.450 Nevertheless, the same considerations thatlead a tribunal or court to be satisfied as to the need for an administration orderin the other States and the Northern Territory seem to be relevant inQueensland at least. There, in a 2003 case, the tribunal that is now QCAT wassatisfied that there was a need to appoint an administrator for the person thehearing was about because without an appointment his needs would not havebeen adequately met and his interests not adequately protected. The medicalevidence showed that he was unable to manage his own finances. There wereconcerns “that other people could take advantage of [the person] if they gothold of his details” and there was a substantial debt owing on his car that had tobe addressed.451

8. 11. 8. The best interests criterionThere is a “best interests” or “interests” criterion to be met before anadministration order is made in all the Australian jurisdictions except SouthAustralia and the Local Court in the Northern Territory.452 In Western Australiathe best interests criterion is found in the principles of the Guardianship andAdministration Act 1990 (WA).453

In a 1986 case involving a young man blinded and significantly brain damagedin a motor vehicle accident the question was whether to appoint as financialmanagers of his estate the parents and carers or to commit his estate to themanagement of the then Protective Commissioner. Citing English and New

448 Miner v Anderson (unreported, Supreme Court of NSW, Cohen J 30 November 1998) BC9807761.449 Ibid. 6.450 Guardianship and Administration Act 2000 (Qld) s 12(1)(c)(i); Guardianship and Management ofProperty Act 1991 (ACT) s 8(1)(c)(i).451 Re CP [2003] QGAAT 24 [48]. For a Western Australian example see, Re AJH (1994) 12 SR (WA)392.452 Guardianship Act 1987 (NSW) s 25G(c) and s 4, s 4(a) in particular (Guardianship Tribunal), andPublic Trustee and Guardian Act 2009 (NSW) s 39, s 39(a) in particular (Supreme Court and MentalHealth Review Tribunal); Guardianship and Administration Act 2000 (Qld) s 12(1)(c); Guardianshipand Administration Act 1985 (Vic) s 46(3); Guardianship and Administration Act 1995 (Tas) s 51(3);Aged and Infirm Persons’ Property Act 1979 (NT) s 12(1) and the Guardianship and Management ofProperty Act 1991 (ACT) s 8(1)(c)(ii).453 See s 4(2)(a). See also JH and EP [2010] WASAT 51, a case in which the wishes of a person with alongstanding mental illness were overruled because her estate was at significant risk and it was in herbest interests that the Public Trustee be appointed as her administrator to negotiate with creditproviders and take steps to protect her estate.

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South Wales cases as authority, Powell J said:

It is … a commonplace that questions arising for determination in theProtective Division of the Court are determined solely by reference tothe interests of the particular defendant, the Court's overriding dutybeing to ensure that that defendant's estate is so managed as to serve thatdefendant's best interests.454

Young J has taken the view that the consideration of “best interests” in relationto administration orders must include taking into account the welfare, healthand well-being, in a wide sense, of the person the hearing is about. Also, whatis in their interests means what is for their personal benefit and not for thebenefit of their family or friends or estate.455

8. 11. 9. Onus of proofIn the courts the onus of proof lies on the person applying for the order to bemade, or for it to be revoked.456 However, if a tribunal conducting itsproceedings in a less formal manner, taking a more inquisitorial approach andinforming itself of the matters to be decided in the manner it thinks fit that isconsistent with the requirements of procedural fairness, it will be up to thetribunal to be satisfied that the statutory criteria have been met rather than theapplicant having to prove that they have been.

8. 11. 10. Standard of proofThe standard of proof required in both courts and tribunals is on the balance ofprobabilities tempered by the effects of the nature of the application, thesubject-matter of the particular case, the gravity of the matters alleged and thestrength of the evidence.457

However, when dealing with applications to revoke administration orders, theSupreme Court of New South Wales has taken a careful approach to peopleawarded substantial damages for brain injuries who subsequently seek to byfree from administration in order to spend the money awarded. As Young Jpointed out in a 1999 case, the court is always wary when someone awardeddamages for permanent brain damage in a motor vehicle accident case a fewyears later wishes to take up the position that, having got those damages theyshould now be free to spend them.458 In a 2000 case Young J noted that aperson who wished to show that seven years after the damages were assessedfor head injuries, things have changed to such an extent that despite their

454 JJK v APK (1986) Aust. Tort Reports 80-042, 67,880, BC8600849, 11.455 Re R [2000] NSWSC 886 [35] and [37].456 Re GH1 [2005] NSWSC 581 [22], 221 ALR 589.457 Briginshaw v Briginshaw (1938) 60 CLR 366; Re GH1 [2005] NSWSC 581, [23] (also reported asRe GHI (a protected person) (2005) 221 ALR 589. For a case in which the standard of proof for theproof of disability was “more likely than not” see, FF and IF (Guardianship) [2007] VCAT 1298 [32].458 Re C (TH) and the Protected Estates Act [1999] NSWSC 456 [15].

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injuries, they were then able to manage their own affairs bears a very heavyonus.459

In a 2005 case, Campbell J of the Supreme Court of New South Wales pointedout that in deciding whether an applicant for revocation of an administrationorder had discharged their onus of establishing that they were capable ofmanaging their own affairs, it was legitimate to take into account theseriousness of their making a mistake which wasted capital. A very importantfactor was the extremely long pension preclusion period, often many decadesand in that case nearly 22 years. Campbell J conceded that any member of thecommunity managing their own affairs is at some risk of making a financialmistake, but noted that for most members of the community the seriousness ofmaking such a mistake is alleviated by the fact that, even if the mistake is avery serious one which results in their bankruptcy, they still have, in manycases, the capacity to earn a living up to retirement age, and usually, if they areunable to earn their living or are past retirement age, they have a right tosupport of a rudimentary kind from social security.460

8. 11. 11. Who to appoint as administrator – a “checklist” of considerations

In the leading New South Wales Court of Appeal case on the appointment andremoval and replacement of administrators, Kirby P noted that it wasinappropriate for the discretion to appoint or remove administrators to beconfined by rigid rules or even “guidelines” expressed in general terms.461

Nevertheless, he did suggest, but without limiting the possibility of otherapplicable considerations, a checklist of considerations that might be kept inmind.462

It is suggested that these are relevant to all Australian jurisdictions, but must beread so as not to change or reduce the effect of any statutory criteria dealingwith the appointment of administrators. The checklist deals with considerationsrelevant to the appointment of both private persons and public bodies asadministrators. It is summarised below as follows:

1. The appointment of an administrator invites the exercise of a discretionthat derives from legislation and must be exercised keeping in mind thepurposes of the legislation. The exercise of the discretion should not benarrowed to apply only to certain circumstances because otherdiscretions were so limited because of other legislation,

2. An application for the removal of a person validly appointed as amanager will not invoke the same discretion as the initial appointment

459 H v H (unreported, NSW Supreme Court, 20 March 2000, Young J), 9. See also Re GH1 [2005]NSWSC 581.460 Re GH1 [2005] NSWSC 581, [126].461 Holt v Protective Commissioner (1993) 31 NSWLR 227, 241.462 Ibid.

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of a manager. It will normally be necessary for the party seeking achange in the status quo to show some reason why the court or tribunaldealing with the matter should do so,

3. The abiding rule in the exercise of powers under guardianship andadministration legislation is the achievement of best interests of thosefor whom guardianship or administration orders have been made,

4. Where it is shown that a person appointed as manager is incompetentor has acted in a relevant way improperly or unlawfully, the court ortribunal may terminate the appointment and appoint another manager,

5. Ordinarily, a person who would face a conflict of interest and dutywould not be appointed a manager of a person's estate. However,in some family situations, inter-related property interests may presentsuch conflicts. Sometimes they will be more apparent than real. They donot necessarily present an absolute bar to appointment as a manager forotherwise this would exclude from consideration a range of familymembers who were in every other way appropriate,

6. When weighing up the competing advantages of appointing a familymember or the statutory body authorised to act as an administrator, forexample the State Trustees Ltd in Victoria, the (now NSW Trustee) inNew South Wales, the Public Trustee in Queensland, South Australia,Tasmania, Western Australia and the Australian Capital Territory, or thePublic Guardian or Public Trustee in the Northern Territory, to managethe estate of a person incapable of managing their own financial affairs,the court or tribunal may take the following into account as relevant:

(a) the appointment of the public official has the followingadvantages:

(i) the manifest independence of the statutory office;

(ii) the advantages of a dispassionate and neutral approachwhere there is a potential for family conflict and sharplydivided views concerning the best interests of the person;

(iii) the expertise of the staff of the statutory body, theirexperience in managing estates, the know how accumulatedby them over time and their impeccable reputation; and

(iv) the security provided to the estate against loss ordamage,

(b) the appointment of a family member has the followingadvantages:

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(i) the size and complexity of the estate: in a smaller estateit may often be appropriate to appoint a family member whowill be entirely familiar with the assets and liabilities andreadily able to manage them with greater economy andpossibly free of cost to the person. (Public officials areentitled to and ordinarily do recover their fees.),

(ii) the capacity of the incapable person, to interact withtheir, so far that as possible, they may remain in charge of,or at least be able to influence, the broad directions of themanagement of the estate,

(iii) the ingredient of love and affection and unquestioningdevotion to the person which an appropriate familymember can add to the task of management. Whilst theoffice of manager is, by its definition, concerned withproprietary and financial matters and involves the prudentcontrol of the property and like interests of the protectedperson, in the nature of things the manager of the estate ofan incapable person is more likely than a general trustee orreceiver to become involved in decisions which affect thatperson's quality of life. A lifetime knowledge of the personand a devotion to his or her interest may contribute to thatquality. It may more readily be secured by the appointmentas manager of a family member with the requisiteknowledge and motivation;

(iv) any special features of the case which may requireparticular attention, and

(v) any special qualities of the applicants to act as managerswill be relevant.

7. Different considerations may affect the management of an estatecomprised of few liquid assets when contrasted to one which enjoyssubstantial and regular income. The court or tribunal appointing amanager from the family of the incapable person, should satisfy itselfthat the income and (where necessary) the capital assets of that person'sestate are devoted to the incapable person's interests. Especially wherethe bulk of the estate is made up of a verdict calculated by reference tothe protected person's expectation of life and as compensation forinjuries, disabilities, pain and suffering and loss of the enjoyment of lifeit is appropriate that the capital and income should be expended, as

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intended, to advance the quality of life of the incapable person ratherthan to increase in due course the assets of their family.463

Kirby J noted that he may have overlooked considerations which would berelevant to particular cases and then repeated that it was undesirable that, byrules or guidelines, the broad discretion of appointment and revocation shouldbe controlled.464

Particularly when dealing with an initial application for an administration orderbut also relevant when reviewing an order, dissension in the family, providedthat the conflict goes beyond “typical family differences”, can be a reason apublic official may be appointed administrator over a relative in the bestinterests of the person the hearing is about. So can the lack of business abilityon the part of the relative proposed as administrator. The best interests of theperson the hearing is about remains the abiding rule and it is not necessary forthe tribunal or court dealing with the matter to expressly find that the relativeproposed as administrator was deficient in their ability to act as administratorbefore moving to appoint a public official or a non-relative.465

In what could be seen as a high-water mark example of the discretion to replacea manager, in 2000 Hodgson J of the New South Wales Supreme Court foundthat the relationship between the mother and primary carer of a man themanagement of whose estate had been committed to the (now NSW Trustee)had broken down and could not be restored. This had adverse consequences forthe man and his estate because his mother could not deal directly with the thenProtective Office. She engaged solicitors to do this, incurring very substantialcosts that were paid out of her son’s estate. Although Hodgson J found nomaterial breach of duty by the then Protective Commissioner, he consideredthat the history of the particular estate did not suggest that there was anysignificant advantage to the man in retaining the then Protective Commissioneras manager, rather than appointing a reputable trustee company. Consequentlyhe replaced the then Protective Commissioner as manager with a trusteecompany even though there was likely to be a small financial disadvantage tothe estate and the possibility that the relationship between the mother and thetrustee company could break down in the future. Hodgson J considered that onbalance, the advantage in removing a manager outweighed any disadvantageinvolved in the appointment of the new manager.466

In a 2002 case Windeyer J of the New South Wales Supreme Court followedHodgson J’s approach, and replaced the then Protective Commissioner as

463 Ibid. 241-243. Kirby J’s guidelines, given in a NSW Court of Appeal case, post-date and probablysupersede the guidelines that Powell J had noted had grown up to assist judges to exercise theirdiscretion as to whether to appoint the statutory manager of the estates of incapable persons or familymembers in JJK v APK (1986) Aust. Tort Reports 80-042, 67,881-67,882, BC8600849, 15-17.464 Ibid. 243.465 See as examples, Matter of Hancock 828 S. W. 2d 707 (1992) and Matter of Benson 124 S. W. 3d79 (2004).466 MB v Protective Commissioner (2000) 50 NSWLR 24, [126]-[129].

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manager with a trustee company.467 He pointed out that it was not his intentionto decide that an order for a change of managers was justified by annoyance orminor complaint or even a justified complaint. He noted that such matters wereoften able to be dealt with by the Court giving directions under the now NSWTrustee and Guardian Act 2009 (NSW).468 Windeyer J also noted that forgeneral management of the estate of a sometimes difficult person, the longexperience of the (now NSW Trustee) is valuable.469

There were three matters that led him to change managers. The first was thelack of continuity of managers in the Office of the then ProtectiveCommissioner which causes distress when relationships are built up and thensevered without consideration of the effect on the person whose affairs areunder management and their family or others who are providing services orsupport to them. The second was that the trustee company’s financial plan waslikely to be more beneficial to the person whose affairs were undermanagement than the then Protective Commissioner’s financial plan. The thirdmatter was the uncertainty of the fees to be charged by the then ProtectiveCommissioner.470 This last matter has been resolved since Windeyer J’sdecision. There is a cap on the fees that the NSW Trustee may charge, but shemay charge fees for specific services.

8. 11. 12. Appointing private managers

In a 2000 case, Young J of the New South Wales Supreme Court pointed outthat:

[I]f a responsible member of the incapable person's family, with theconsent of other members of the family and particularly when joinedwith a person with financial expertise, seeks to be the manager, such anorder will, at least at present, usually be made almost as of course.471

Nevertheless, before a court or tribunal may appoint them as an administrator,it has to be satisfied that they are a “suitable person”. In the same case theYoung J said:

In the case of a relative, the Court must look to see that there areminimal conflicts of interest, or, if conflicts of interest cannot beavoided, that they are properly dealt with. In the case of a privatemanager who purports to have financial expertise, the Court needs to besatisfied not only of that person's good fame and character and of his or

467 M v Protective Commissioner [2002] 421.468 Ibid. [45]. See NSW Trustee and Guardian Act 2009 (NSW) s 61.469 Ibid. [46].470 Ibid. [43] and [46]471 Re L [2000] NSWSC 721, [7].

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her ability generally to manage funds, but also that that person has agood conception as to what is required of a fund manager.472

In another case he also decided in 2000, Young J was more specific about whata court or tribunal considering appointing a private manager had to be satisfiedabout, particularly if the estate involved a large amount of money. He said thatthe court or tribunal had to be satisfied that:

1. any “so called” financial expert has, in fact, expertise to allow him orher to assist the incapable person in the circumstances of the particularcase; and

2. any relative has either no conflicts of interest or, alternatively, theconflicts of interest are able to be handled by appropriate guidelinesfrom the (now NSW Trustee).473

Young J also noted that there would always be some conflict arising in themanagement of the estates of incapable people. Some of these may be benignconflicts as shown in the English case Re W.474 Other potential conflicts canarise from deciding whether small donations should be made to charities orwhether gifts should be made to relatives for Christmas and things of thatnature. Young J noted that most of those can be dealt with sensibly bydirections of the (Supreme Court or now NSW Trustee) or by managementplans developed by the (now NSW Trustee) where the Guardianship Tribunalmakes the financial management order.475

Young J also noted that while it was “most acceptable” that a parent who is thefinancial manager of a person who cannot manage their own affairs lives in thesame house as their adult child rent free, care needs to be taken that themanager is not receiving a substantial benefit at the expense of the incapableperson.476 Some potential conflicts of interest or conflicts within families donot prevent the appointment of a family member as administrator while othersmake the appointment of an independent public official as administratoressential. It depends on the facts in each case.477

For the assistance of financial managers generally, Young J also noted theSupreme Court “does not countenance” people obtaining damages on the basisthat certain improvements to their house are absolutely necessary and then notsubstantially carrying out those improvements with the verdict money theyreceive.478

472 Ibid. [12].473 Re R [2000] NSWSC 886 [49]. For a more recent example of the NSW Supreme Court appointingjoint private financial managers see, Collis [2009] NSWSC 852.474 [2000] Ch 343.475 Re R [2000] NSWSC 886 [50].476 Re L {2000] NSWSC 721 [16].477 Contrast the facts in Re TAW [2004] QGAAT 56 with those in Re GE [2005] QGAAT 32.478 Re L {2000] NSWSC 721 [17] and [18].

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8. 11. 13. Effect of administration ordersAs stated in the David Case, the common law position on the effect of anadministration order made by a court or tribunal is that the power of a personwhose financial affairs are placed under administration (a protected person) todeal with their estate is suspended, for the duration of the order, in relation toso much of that estate as is placed under management of those appointed toadminister it.479 For a discussion of the effect of administration orders on theright of the person whose estate is under management to deal with that estate isdealt with in Chapter 3. 3. 5. 3.

The estate of the person does not vest in the administrator. It remains theproperty of the person the administration order is about. This is the positionestablished in the common law, but it is specifically referred to in thelegislation of some of the States and the two Territories.480

8. 11. 14. Functions and powers of administrators8. 11. 14. 1. Does the administrator have all the functions and powers that theperson whose estate they are administering would have if they were capable?In Queensland, unless the terms of their appointments limit them,administrators are authorised to do anything in relation to the estate they havebeen appointed to administer that the person whose estate it is could have doneif they had capacity.481

In New South Wales, the NSW Trustee may do all these things if appointedfinancial manager (administrator), subject to any limiting directions given toher by the Supreme Court in relation to a particular estate.482 However, aprivate financial manager, as already noted at 8. 3. 11 above, has only thosefunctions and powers given then in an order by the NSW Trustee.483 TheSupreme Court may also make such orders.484

In the Australian Capital Territory, ACAT may give a person’s manager all thepowers the person with impaired decision-making capacity would have inrelation to their property if they were competent.485

479 David by her Tutor the Protective Commissioner v David (1993) 30 NSWLR 417.480 Guardianship and Administration Act 1985 (Vic) s 53; Guardianship and Administration Act 1993(SA) s 39(1); Guardianship and Administration Act 1990 (WA) s 69(4); Guardianship and Managementof Property Act 1991 (ACT) s 71 and Aged and Infirm Persons’ Property Act 1979 (NT) s 20.481 Guardianship and Administration Act 2000 (Qld) s 33(2). In NSW the Protective Commissioner hasall and private financial managers have all or any specified function necessary and incidental and careof the estate, see Guardianship Act 1987 (NSW) ss 24(1) and 30(1). In Tasmania administrators havethe general care and management of the estates they are administering Guardianship andAdministration Act 1995 (Tas) s 56(1)(a).482 NSW Trustee and Guardian Act 2009 (NSW) ss 57(1) and 61. Note the possible role of theGuardianship Tribunal in ss 56(b) and 64(4).483 Ibid. ss 63-66.484 Ibid. ss 63-65.485 Guardianship and Management of Property Act 1991 (ACT) s 8(3).

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It is suggested that subject to any specific limitations in the legislation of theother States or the Northern Territory, administrators either automatically have,or may be given, by the relevant, tribunal, court or other authority anyfunctions or powers the person whose financial affairs are under managementwould have in relation to their property either real or personal. These functionsand powers are set out in relation to some of the States and Territories in 8. 3.above, but the next section sets out the functions, powers and requirements ofadministrators that apply in Queensland. It is suggested that they are at leastguidelines to administrators in the other States and the two Territories as totheir functions and powers and as to how they should operate as administrators.

8. 11. 14. 2. The functions and powers and requirements/obligations ofadministratorsFor the assistance of family members and friends who are appointed asadministrators in Queensland, Guardianship and Administration Act 2000(Qld) sets out a series of powers, functions and requirements ofadministrators.486 As noted in the last section, it is suggested that these applyequally to administrators, financial managers and managers appointed in theother States and Territories of Australia. These are set out below.

Administrators must apply the general principles of the legislation under whichthey are appointed.487

Administrators must exercise their powers and functions honestly and withreasonable diligence in order to protect the interests of the person whose estatethey have been appointed to administer.488 They must also exercise theirpowers as required by the terms of the order appointing them.489

Administrators should avoid entering into transactions which would result in aconflict between the duty they owe as an administrator towards the personwhose estate they have been appointed to administer and:

1. their own interests, or2. the interests of those with whom they have a close personal or business

relationship, or3. another duty they have as the person’s administrator.490

An example of this is the administrator buying the car of the person whoseestate they have been appointed to administer. Administrators should enter into

486 Guardianship and Administration Act 2000 (Qld) ss 33-55.487 Guardianship and Administration Act 2000 (Qld) s 34. In Queensland those general principles arefound in Schedule 1 of the Act.488 Ibid. s 35.489 Ibid. s 36.490 Ibid. s 37.

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such transactions only if authorised to do so by the tribunal or other body (inNew South Wales the NSW Trustee) supervising their administration.

Where two or more persons are appointed as administrators of the estate of anincapable person, they should consult with one another regularly to ensure thatthe interests of the person whose estate they have been appointed to administerare not prejudiced by a breakdown in communication between them.491

Because of this possibility, where there is conflict in a family relating to aperson for whom an administration order is being made, careful considerationshould be given before appointing as joint administrators those family memberswho are in conflict with one another or who may become so as they arerepresentatives of differing factions within a family. This is particularly so inthose States and Territories in which the joint managers “must concur in everyact, matter or thing done in relation to the estate by a manager”.492

In Queensland administrators have a right to all the information the personwhose estate they have been appointed to administer would have been entitledto if they had capacity and which is necessary for the administrator to have inorder to make an informed exercise of the particular powers they have asadministrators. Also, if an administrator requests such information, a personwho has custody or control of that information must give it to the administrator,unless the person has a reasonable excuse for not doing so.493

Furthermore, if the person who has custody or control of the information doesnot give it to the administrator, the administrator may apply to QCAT for anorder that the person give the information to the administrator. If QCAT makessuch an order the person must give the information to the administrator unlessthey have a reasonable excuse for not doing so. A person has a reasonableexcuse if giving the information might tend to incriminate them. This provisionspecifically overrides any restriction, in legislation or the common law, aboutthe disclosure or confidentiality of information; and any claim ofconfidentiality or privilege, including a claim based on legal professionalprivilege.494

The privacy legislation of the Commonwealth and some of the other States andTerritories, is sometimes relied upon to deny administrators (and guardians)information they need to make the decisions they are authorised to make underthe terms of their appointments. This is not the purpose of such legislation, butits drafting is usually complicated and its administration so conducted thatauthorised substitute decision-makers are sometimes denied necessaryinformation with outcomes that contradict the intended effect of the modernguardianship and administration legislation.

491 Ibid. s 40.492 See Aged and Infirm Persons’ Property Act 1979 (NT) s 19.493 Guardianship and Administration Act 2000 (Qld) s 44(1) and (2).494 Ibid. s 44(3), (4) and (5).

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The Queensland legislation also provides that where it is necessary orconvenient for the exercise of power given to an administrator, they mayexecute an instrument with their own signature or, if sealing is required or seal;and do any other thing in their own name, provided that they execute theinstrument in such a way that shows that they executed it as administrator.495

Consistent with this approach, if an administrator is empowered to do a thing,they have the power to execute a deed to do the thing.496

Private administrators are entitled to reimbursement from the estate of theperson whose estate they have been appointed to administer for any reasonableexpenses they incur while acting as administrator, while those who carry onbusinesses as administrators, trustee companies and Public Trustees are entitledto remuneration for the provision of their services.497

Administrators must keep records that are reasonable in the circumstances andbe able to produce them to their supervising authorities when asked to do so.498

There are different rules in each State and Territory about the kinds of recordsadministrators must keep and when they have to present them. However,administrators need to be able to show how they have been managing the estatethey have been made responsible for. Even if the estate is that of a closerelative or of a family member who has never been able to manage their ownaffairs, the estate remains the property of that person. It does not become theproperty of the administrator. They have no legal or equitable interest in theproperty, only the obligation to manage it in the best interests of the person theadministration order is about. This is why administrators must keep the estateproperty separate from their own property, unless the administrator owns theproperty jointly with the person the administration order is about.499

Administrators may invest money from the estate they are administering butonly in investments that a trustee investing under trustee legislation may investin. However, they may continue the existing investments of the person whoseestate they are managing and taking up rights to issues of new shares, oroptions for new shares, arising from existing shareholding.500 In some Statesand Territories they may obtain approval to invest outside the ambit of thetrustee legislation.

Administrators may give gifts from the estates they are managing but usuallyonly if the gift or donation of the nature the person whose estate is beingmanaged made when they had capacity or was a gift or donation of the naturethe person might reasonably be expected to make and the gift’s value is not

495 Ibid. s 45.496 Ibid. s 46.497 Ibid. ss 47 and 48.498 Ibid. s 49.499 Ibid. s 50.500 Ibid. s 51.

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more than what is reasonable having regard to all the circumstances,particularly the person’s financial circumstances.501

Administrators may provide from the estates they are managing for the needsof the dependants of those whose estates they are managing. However, what isprovided must not be more than what is reasonable having regard to all thecircumstances, particularly the financial circumstances of those whose estatesthey are managing.502

It is well settled that where a person does not have the capacity to marry, nocourt or tribunal or substitute decision-maker such as an administrator orguardian can consent to marriage on behalf of an adult who lacks the capacityto marry. 503 However, the question has arisen as to whether an administratormay commence proceedings on behalf of the person whose estate they aremanaging to dissolve a marriage or have it declared void or seek a propertysettlement or a legal separation.504 This matter is discussed in Chapter 2. 5 and2. 6.

The role of the administrator comes to an end at the death of the person whoseestate they are managing and their affairs are then administered by theirexecutor or by anyone else authorised by the relevant Supreme Court tomanage their estate.505 However in some States, the administrator has someleeway to continue to act after death.506

8. 11. 14. 3. Administrators for legal proceedingsIn Western Australia, WASAT may make plenary administration orders ororders limited to specific functions. In 2001 the then Guardianship andAdministration Board of Western Australia noted:

If the only issue is the conduct of litigation which is either underway orcontemplated, the usual order of the Board is to appoint a limitedadministrator with the authority to conduct legal proceedings on behalfof the represented person (the person the hearing is about).507

For those States and the Australian Capital Territory where it is possible toappoint an administrator for the purpose of conducting or defending litigation

501 Ibid. s 54.502 Ibid. s 55.503 Sheffield City Council v E [2004] EWHC 2808 (Fam) [100].504 Re An Incapable Person D [1983] 2 NSWLR 590. For an example from Western Australia see, RePD [2008] WASAT 13.505 Re Bennett [1913] 2 Ch 318, 323 and 326. See also, Protected Estates Act 1983 (NSW) s 34 (1)(c);Guardianship and Management of Property Act 1991 (ACT) s 29; Aged and Infirm Persons’ PropertyAct 1979 (NT) s 15(1).506 Aged and Infirm Persons’ Property Act 1940 (SA) s 11(3); Guardianship and Administration Act1993 (SA) s 41; Guardianship and Administration Act 1990 (WA) s 79. Note Guardianship andAdministration Act 1986 (Vic) ss 58AB and 58G.507 Mr CAD [2001] WAGAB 1 [10], 28 SR (WA) 333.

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on behalf of an incapable person, the recent consideration of capacity to litigateby English judges may be useful. The settled view in England is that thequestion of capacity to litigate is not something to be determined in theabstract. The focus has to be on the particular piece of litigation in relation towhich the question of capacity arises. The question is always whether theperson has capacity to litigate in relation to the particular proceedings in whichthey are involved.508 The issue is addressed by asking three questions:

1. does the litigant have the mental ability to recognise the problem,2. can the litigant obtain and receive, understand and retain relevant

information, including advice, and3. can the litigant weigh the information (including that derived from

advice) in the balance in reaching a decision.509

In a 2002 case Chadwick LJ rejected the submission that a person who wasincapable of taking investment decisions in relation to a large sum received ascompensation would be held, for that reason, to be incapable of pursuing aclaim for that compensation. He accepted that capacity to pursue a claimrequired capacity to take a decision to compromise that claim and that thatcapacity to compromise required an understanding of what the effects of acompromise would be. To be capable of litigating the person would have tounderstand that the compensation monies would have to be dealt with so as toprovide for the future. But the person would not have to have an understandingof how that would be done.510

In New South Wales, if the estate of an incapable person has already beencommitted to the management of the NSW Trustee, she may bring or defendlegal actions in any court or tribunal in New South Wales on behalf of theperson whose estate the order is about.511 If a private person has beenappointed as the manager of an incapable person’s estate, the NSW Trusteemay authorise the manager to bring or defend legal actions in any court ortribunal in New South Wales on behalf of the person whose estate the order isabout.512

Now that the New South Wales Guardianship Tribunal has an unencumbereddiscretion to exclude specified parts of an estate from the administration order,it may be able to make an order limited to the administrator bringing ordefending legal actions in courts or other tribunals .513 Nevertheless, the

508 Sheffield City Council v E [2004]EWHC 2808 (Fam) [38] and Masterman-Lister v Brutton & Co[2002] EWCA Civ 1889. For a consideration of the matter in relation to litigation in the Federal Courtof Australia see, L v Human Rights and Equal Opportunity Commission [2006] FCAFC 114 [25]-[35]and Owners of Strata Plan 23007 v Cross [2006] FCA 900 [54]-[73], 233 ALR 296 and for theSupreme Court of Queensland see, Aziz v Prestige Property Services Pty Ltd [2007] Qsc 265..509 Sheffield City Council v E [2004]EWHC 2808 (Fam) [133].510 Masterman-Lister v Brutton & Co [2002] EWCA Civ 1889 [83].511 NSW Trustee and Guardian Act 2009 (NSW) s 16(1)(s).512 Ibid. s 64(1)and(2) .513 Guardianship Act 1987 (NSW) s 25E.

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practice of applying to the court or tribunal in which the litigation is to becommenced or is already under way to appoint another person to commence ordefend legal action brought by or against the incapable person as the incapableperson’s tutor, next friend or litigation guardian may be continued.

8. 11. 14. 4. Payments for past care given gratuitouslyIn a 2004 case in the New South Wales Court of Appeal, McColl JA noted thatthe decisions made by judges applying the common law were founded on theproposition that the courts exercised their protective jurisdiction to manage anincapable person’s estate for the benefit of that person, but took “a large andliberal” view of what that benefit was and that it included not only what maybenefit the incapable person directly, but what that person “as a right-mindedand honourable” would desire to do. Consequently, payments for pastgratuitous care could be made, where appropriate, in the exercise of the court’sinherent jurisdiction but also in the exercise of its statutory jurisdiction.514

8. 11. 15. Reviews of administration ordersThe courts and tribunal empowered to make administration orders in thevarious States and Territories also have the power to review such orders and,and where they are provided, apply the statutory criteria that are set out fordealing with those matters. They will also apply the common law that has notbeen replaced by or rendered inappropriate by the legislation they operateunder.

While some administration orders are revoked on review, in most cases theperson the order is about remains incapable of managing their property andaffairs and in need of an administrator for the rest of their lives. Usually anadministration order, once made, remains the least restrictive way of achievingthe best interests of the person the order is about. As already noted, the judgesapproach applications by those awarded substantial damages for brain injuriesassessed to be permanent to have the administration orders in relation to themrevoked with a degree of skepticism, particularly if the evidence indicates atendency in the person to spend beyond the ability of their award to sustain orthat the person has had a range of money-making plans and a disinclination totake financial advice.515

The risk of being unable to obtain income support through the Australian socialsecurity system because of lengthy pension preclusion periods, is a particularproblem for those who have received substantial awards of damages based onthe likelihood that, because of their injuries, they would not be able to obtain ormaintain employment. However, treating it as a legitimate matter to take into

514 See NSW Trustee and Guardian Act 2009 (NSW) and Protective Commissioner v D [2004] NSWCA216 [150]-[151], 60 NSWLR 513. McColl JA notes that payments for past gratuitous care can also bemade, where appropriate, by statutory administrators at least in Western Australia, South Australia,Tasmania the Australian Capital Territory and, probably, Queensland [[143]-[148].515 See for example, Re GH1 (2005) 221 ALR 589 and H v H (unreported, NSW Supreme Court, 20March 2000, Young J).

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account in deciding whether an applicant for revocation of an administrationorder had discharged their onus of establishing that they were capable ofmanaging their own affairs, raises the question of paternalism that concernedCavanough J of the Supreme Court of Victoria and Miles CJ of the SupremeCourt of the Australian Capital Territory.516

As Cavanough J pointed out in the XYZ Case, there are three separate andcumulative requirements for making an administration order, the first beingsatisfaction by the tribunal that the person the hearing is about is a person witha disability.517 If this matter is not proved to the satisfaction of the tribunaldeciding the matter, then the tribunal proceeds no further and dismisses theapplication. The question then becomes, if there is an application to review,rehear or reassess the order with a view to revoking it and the evidence satisfiesthe tribunal that the person is not currently a person with a disability, does thismean that the tribunal must revoke the order without considering any othermatters including the risks to the person the order applies to of revoking theorder?

It is suggested that the answer depends on the way the legislation of theparticular State or Territory is framed. In Victoria, if Cavanough J’s opinion isapplied to applications seeking revocation of an order, the answer would haveto be yes. Tasmania’s legislation is very similar to that of Victoria on thismatter, so the answer would be yes there.518

Elsewhere in Australia the answer is likely to be no as the determination ofincapacity involves an assessment of both the person’s disability and the effectof that disability. In New South Wales the Court or the relevant tribunal mustbe satisfied that the person is capable of managing their own affairs, arequirement that involves a consideration not only of the person’s disability butalso the effect of that disability on their capacity to manage their own affairs.519

The same consideration is required in South Australia and the AustralianCapital Territory.520 In the Northern Territory, because the definition ofintellectual disability requires not only a disability but also inability to makereasonable judgments or informed decisions arising from that disability, theLocal Court would have to consider both matters before revoking an order.521

The Supreme Court of the Northern Territory would apply the common law toany application to revoke a protection order. However, once the court ortribunal is satisfied that the person is capable of managing their affairs, itshould discharge the administration order even though it may appear to have a

516 XYZ v State Trustees Ltd [2006] VSC 444, [58] (Cavanough J) and A v Guardianship andManagement of Property Tribunal [1999] ACTSC 77, [67] (Miles CJ).517 XYZ v State Trustees Ltd [2006] VSC 444, [44].518 Guardianship and Administration Act 1995 (Tas) s 51(1).519 Guardianship Act 1987 (NSW) s 25P(2) and NSW Trustee and Guardian Act 2009 (NSW) s 86.520 Guardianship and Administration Act 1993 (SA) ss 3 and 35(1) and Guardianship andAdministration of Property Act 1991 (ACT) s 8(1),521 Adult Guardianship Act, 1988 (NT) s 3.

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discretion in the legislation not to do so.522 As Young J pointed out in 1999case involving a woman whose financial affairs were committed to the thenProtective Commissioner in 1990 as a result of injuries she received in a motorvehicle accident, whose preclusion period was over and who wanted to investin a noodle business:

There is no room in the legislation for benign paternalism. A person isallowed to make whatever decision she likes about her property, good orbad, with happy or disastrous effect, so long as she is capable.523

In Western Australia, WASAT may revoke an administration order if itconsiders that to do so is necessary in the best interests of the person the orderis about.524 This necessarily involves a consideration of the consequences ofrevoking an order. However, if the person still meets the first criterion for themaking of an order namely that they still have a mental disability by reason ofwhich they are unable to make reasonable judgments about matters relating toall or part of their estate, then it would be unlikely that WASAT would revokethe order. On the other hand, if the evidence showed that either they no longerhad a mental disability or that disability did not prelude them from makingreasonable judgments, then the foundation requirement for making an orderwould have disappeared and the statutory presumption that the person wascapable of managing their affairs would be in effect.525

In Queensland the question does not arise because of the particular processesQCAT must go through when reviewing an administration order as a result of aperiodic, own motion or requested review. QCAT is required to revoke theorder at the end of the review unless it is satisfied that it would have made theorder on a new application. Consequently, at the end of the review it must besatisfied that the person still has “impaired capacity” for one or more financialmatters meaning that the person is not capable of understanding the nature andeffect of decisions about a financial matter, some financial matters or allfinancial matters or is not capable of freely and voluntarily making decisionsabout one or more financial matters before it may renew the order.526

8. 12. The assessment of financial capacity: the role of the expert8. 12. 1. Understanding the conceptFinancial capacity comprises a broad range of conceptual, pragmatic andjudgmental abilities that distinguish it from more simple and less cognitivelydemanding types of decision-making which are primarily verbally mediated. Itscomplexity renders it an “advanced” or “higher order” activity of daily living(ADL) compared with basic or household ADLs such as shopping, houseworkor bathing. Notwithstanding the inherent complexity of the construct, some

522 PY V RJS [1982] 2 NSWLR 700, 701; Re GHI [2005] NSWSC 581 [26].523 Re C (TH) and the Protected Estates Act [1999] NSWSC 456 [17].524 Guardianship and Administration Act 1990 (WA) s 90.525 Ibid. s 4(2)b)(iii).526 Guardianship and Administration Act 2000 (Qld) ss 12 and 31 and Schedule 4.

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estates are more complex to manage than others; and, some people are moreinvolved in the management of their own affairs than others. Thus, financialabilities vary across individuals depending on their socioeconomic status,occupational attainment and financial experience.527,,528,529 Further, even withinthe financial capacity construct, there may be partial or limited competencysuch that a person may be able to do some things like write cheques or handlesmall amounts of money, but not handle more complex investment andfinancial decisions. 530 The expert must understand, however, that the extent towhich the individual’s unique circumstances are considered by the tribunal orcourt rather than a generic concept of dealing with everyday financial mattersof man (i.e. the subjective or the objective test) depends on the jurisdiction inwhich the expert is operating. For a consideration of the tests developed by thejudges see, 8. 11. 5 which deals with the incapacity criterion.

8. 12. 2. The legal testsWhen asked to perform an assessment of a person’s capacity with regards toadministration or financial management, the expert must direct themselves tothe question of what needs to be proved in their relevant jurisdiction for anorder to be made. The basic elements of the tests for incapacity in financialmanagement are disability, incapacity, need and best interests, although theseare required in variable combinations in the different jurisdictions acrossAustralia. A suggested approach to the assessment of each of these elementswill be outlined.

8. 12. 2. 1 DisabilitySome form of disability must be present for a financial manager to beappointed in the Victorian, South Australian, Western Australian, Tasmanian,Australian Capital Territory and Northern Territory jurisdictions. Whiletribunals in New South Wales and Queensland do not require demonstration ofdisability, provision of this information will usually assist with understandingthe basis of incapacity issues.531 Although the crucial evidence usually relieson an explanation of how the disability impacts on the person’s ability tomanage their affairs (i.e. the person’s capacity), an assessment of the natureand severity of the disability is extremely useful in placing the capacity issuesin context.

527 Okonkwo OC., Wadley VG., Griffith H.R. et al (2006) “Cognitive correlates of financial abilities inmild cognitive impairment” J Am Geriaitrc Society 54: 1745-1750528 Moye J., Marson D.C “Assessment of decision-making capacity in older adults: an emerging area ofpractice and research” Journal of Gerontology 2007; 62B3-11529 British Medical Association and The Law Society, Assessment of Mental Capacity – Guidance fordoctors and lawyers, London, BMJ Books, 2nd. Ed. 2004, p. 51.

530 Marson D.C. Loss of competency in Alzheimer’s disease: conceptual and psychometric approachesInternational Journal of Law and Psychiatry (2001) 24: 267-283.531 Bennett HP, Hallen P. “Guardianship and financial management legislation: what doctors in agedcare need to know” Intern Med J. (2005) 35(8):482-7.

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A 2006 decision from the Tasmanian Guardianship and Administration Boardillustrated the importance of establishing the type of disability underlyingincapacity. The decision showed that getting into serious financial difficultiesbecause of drinking and gambling addictions will not necessarily proveincapacity and inability to make reasonable financial judgments. In that casethe medical evidence indicated that any incapacity that the person the hearingwas about had was likely to be due to alcohol use rather than being due todementia or brain injury. If the person were to stop drinking altogether, there itwould be likely that there would be very little residual incapacity and that theperson would “be able to attend to all normal functions at all times”.532 On thedisability issue the Board stated:

The Board was not satisfied that when (the person the hearing wasabout) is sober, he is a person with a disability; that is the Board did notreceive any conclusive evidence that (the person) has experienced anyabsence, loss or abnormality of mental, psychological, physiological oranatomical structure or function. Even if we were satisfied that theremay be an underlying depression or early stage brain damage, we couldnot be satisfied that by reason of that disability he is incapable ofmaking reasonable financial judgments.533

What sort of disabilities cause absence, loss or abnormality of mental,psychological, physiological or anatomical structure or function? The rangevaries enormously and may include dementia, head injury, developmentaldisability and chronic mental illnesses such as schizophrenia. Financial abilitieshave been shown to be impaired in the early stages of dementia, if not MildCognitive Impairment (a prodromal phase before the onset of dementia,characterised by subjective and objective memory loss, normal performance ongeneral cognitive tests and generally preserved activities of daily living).534,535

8.12.2.2 IncapacityAs stated previously, common to all jurisdictions in the making of financialmanagement orders is the requirement that the person is incapable of makingtheir own decisions or “reasonable judgments” in regards to financial matters.How can these functions be assessed? Billings DP took up the matter ofcapacity assessment in the XYZ Case 536 when it came back to VCAT forrehearing and, in doing so, noted several important issues addressed hereincluding:

532 XT (Admin) 6.3.06 [13] at www.guardianship.tas.gov.au/decisions.533 Ibid. [16].534 Griffith HR, Belue K/., Sicola A., et al (2003) Impaired financial abilities in mild cognitiveimpairment Neurology 60: 449-457.535 Okonkwo OC., Wadley VG., Griffith H.R. et al (2006) Cognitive correlates of financial abilities inmild cognitive impairment J Am Geriaitrc Society 54: 1745-1750.536 [2007] VCAT 1196, [66].

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(a) the limitations of the Mini Mental State Examination(MMSE)inassessing capacity; and

(b) the relationship between neuropsychological test data and real lifefunctioning.

8.12. 3. The assessment of capacity8. 12. 3. 1. Mental statusObtaining the person’s psychiatric history and making or obtaining anassessment of their mental status to exclude symptoms of mental illnessrelevant to financial decision-making such as abnormalities of mood (e.g.depressed or manic states) and thought content (e.g. grandiose delusions orgrandiosity or delusions of poverty) is essential to the assessment of financialcapacity

8. 12. 3. 2. General cognitive screensAs emphasised by Sullivan, the MMSE, which is a general screening tool, wasnot developed to assess capacity.537 Its use in capacity assessments is a subjectof debate due to its cost effectiveness and substantial literature base on the onehand, against its insensitivity, reliance on education and language skills and itsfailure to test executive functions on the other hand.538,539,540 In regards to thelatter, the MMSE does not adequately assess abilities crucial to capacitydeterminations such as the foresight, planning and task execution skillsnecessary to take care of one’s property or to one’s manage funds.541

Not withstanding these limitations, the MMSE can be a useful means ofdocumenting general cognitive abilities and of estimating the severity ofcognitive decline. However, it must supplemented by tests of executive orfrontal lobe function (e.g. judgment, planning and reasoning). Sullivan hasargued persuasively for the need for a two stage capacity assessment involvingan assessment of general cognitive ability followed by a specific measure ofcapacity. There are several reasons for this. They include the relationshipbetween general cognitive abilities such as memory and decision-makingability; the better documentation, knowledge base and standardisation ofgeneral ability tests compared with specific measures of capacity; and finally,that a good general ability assessment may provide insights into why a personfailed a specific ability test.542

8. 12. 3. 3. Neuropsychological testing

537 Sullivan K In Mental Capacity. Measuring mental capacity;models, methods and tests (2005)Collier B, Coyne, Sullivan K. Leichardt :The Federation Press p116538 Sullivan K. Neuropsychological assessment of mental capacity Neuropsychology Review 2004;14(3):131-142.539 Sullivan K in Mental Capacity. Measuring mental capacity; models, methods and tests (2005)Collier B, Coyne, Sullivan K. Leichardt: The Federation Press p116-118.540 Darzins, P, Molloy DW, Strang D. (Ed) “Who can decide? The six step capacity assessment process“(2000) Memory Australia Press, Adelaide, p8.541 Farnsworth MG.,.Evaluation of mental competency American Family Physician (1989) 39, 182.542 Sullivan K (2005) Op cit, p133.

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Neuropsychological testing is clearly far more comprehensive than “bedsidescreening” tests such as the MMSE, in that it usually incorporates a detailedassessment of attention, memory, language, visuospatial abilities and mostimportantly, executive function. However, like the MMSE, neuropsychologicaltesting was not developed to assess questions of legal capacity.543 A commonlycited shortcoming of even detailed neuropsychological testing is its lack ofecological validity (i.e. the difficulty extrapolating from testing to real life). Inthe XYZ Case 544 Billings DP showed insight into this very issue,acknowledging statements by Crowe that neuropsychological examinationshave moderately good success in predicting money management ability andperformance on an important component of instrumental activity of daily livingin the form of automated machine usage, but may fall down on other quality oflife type issues. 545 Crowe commented further that the most appropriate way toassess how someone functions in the real world is to move in with them for amonth and watch how they cope in their daily lives, while acknowledging theimpracticality of such a statement.

What are the neuropsychological correlates of financial abilities? One proposedmodel of financial capacity contains three elements:

1. Declarative knowledge – the ability to describe facts, concepts andevents related to financial activities (e.g. knowledge about currency,personal financial data, interest rates, loans);

2. Procedural knowledge – the ability to carry out motor-based,overlearned practical skills and routines (e.g. making change, writingcheques); and

3. Judgment – the ability to make financial decisions consistent with self-interest both in everyday and novel or ambiguous situations.546

It is judgment which is probably most complex and therefore vulnerable to theeffects of neurodegenerative disorder. For example, in subjects with mildcognitive impairment (MCI), financial ability correlated with attention andexecutive function (i.e. planning, task initiation and persistence, judgement),and it is likely that the basis of functional change in MCI may not be amnestic(i.e. based on memory), but rather, emergent declines in the abilities toselectively attend, self monitor and temporally integrate information (“workingmemory”), and abstract reasoning.547 This further emphasises the need to testexecutive functions and, even more specifically, conceptual understanding offinances rather than over-learned, pragmatic cash transaction skills, which rely

543 Sullivan K. 2004., Op cit, p 136.544 [2007] VCAT 1196, [66].545 Crowe, The parallel universe: Does neuropsychological assessment tell us anything about the realworld? InPsych highlights, June 2005 (www.psychology.org.au/publications/inpsych/).546 Moye J., Marson D.C “Assessment of decision-making capacity in older adults: an emerging area ofpractice and research” Journal of Gerontology 2007; 62B3-11547 Okonkwo OC e al., op cit. (footnote 547).

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on procedural memory (memory for well-learned routines) which are oftenrelatively well preserved until later in the course of neurodegenerative disease.

8. 12. 3. 4. InstrumentsThe appeal of purpose-built tests of financial capacity is that they measure thespecific competency task we wish to assess, in this case the ability to managefinancial affairs. A specific instrument to measure financial capacity has onlyrecently emerged but has contributed significantly in shedding light on thenature of the financial capacity construct. The financial capacity instrument(FCI) is a standardised psychometric instrument based on a conceptual modelof the financial capacity construct which assesses 14 tasks of financial abilitycomprising six clinically relevant domains of financial activity, including:

1. Domain1: Basic Monetary skillsa. Naming coins/currencyb. Coin/currency relationshipsc. Counting coins/currency

2. Domain 2: Financial Conceptual knowledgea. Define financial conceptsb. Apply financial concepts

3. Domain 3: Cash transactionsa. 1-item grocery purchaseb. 3-item grocery purchasec. Change /vending machined. Tipping

4. Domain 4: Chequebook managementa. Understand chequebookb. Use chequebook/register

5. Domain5: Bank statement managementa. Understand bank statementb. Use bank statement

6. Domain 6: Financial judgmenta. Detect mail fraud riskb. Detect telephone fraud risk

7. Domain 7; Bill paymenta. Understand billsb. Prioritize billsc. Prepare bills for mailing

8. Domain 8:.Knowledge of personal assets/estate arrangements9. Domain 9: Investment decision making 548,549

548 Marson, D.C., Sawrie, S.M., Snyder, S., McInturff, B., Stalvey T., Boothe A., Aldridge T.,Chatterjee, A., Harrell, L.E. “Assessing financial capacity in patients with Alzheimer’s disease”Archives Neurology 2000; 57; 877-884.549 Griffith HR, Belue K/., Sicola A., et al (2003) “Impaired financial abilities in mild cognitiveimpairment” Neurology 60: 449-457.

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The instrument yields scores for each domain as well as a total score. Patientswith mild Alzheimer’s disease (AD) performed significantly below controls onall domains except Basic Monetary skills, while patients with moderate ADperformed below norms on all tasks.550 Mild Cognitive Impairment (MCI)participants demonstrated impairments in Financial Conceptual knowledge,Cash Transactions, Bank Statement Management and Bill Payment, althoughthese impairments were mild and may only apply to a subset of patients withMCI.

Although administering such an instrument in its entirety may be beyond thescope of a standard capacity assessment, many of the tasks can be useful toguide the clinician in devising questions which might specifically test financialcapacity (see below).

8. 12. 3. 5. Need and best interestsAs previously stated, tribunals or courts in New South Wales, Victoria,Tasmania and Western Australia, have to be satisfied that the person thehearing is about is in need of another person to manage their financial affairsbefore it may make an administration order in relation to that person.551

Further, New South Wales, Victoria, Tasmania, and Queensland have a “bestinterests” or “interests” criterion to be met before an administration order ismade.552 Sometimes health professionals will be able to provide evidence as toneed or best interests, depending on how well they know the patient and theirsocial milieu and functioning. It is sometimes useful to consider such issues interms of the risk or consequences of not making an order. For example, is theperson not meeting their everyday needs? Are alternative informalarrangements with regards to management of affairs working? Is the personbeing exploited financially?

8.12.4. Report writingA suggested outline for medicolegal report relating to financial management isoutlined in BOX 8.12.14:

550 Marson Ibid.,551 Guardianship Act 1987 (NSW) s 25G(b) for the Guardianship Tribunal in NSW; Guardianship andAdministration Act 1986 (Vic) s 46(1)(a)(iii), Guardianship and Administration Act 1995 (Tas) s51(1)(3)(c), Guardianship and Administration Act 1990 (WA) s 64(1)(b).552 Guardianship Act 1987 (NSW) s 25G(c); Guardianship and Administration Act 2000 (Qld) s12(1)(c); Guardianship and Administration Act 1985 (Vic) s 46(3); Guardianship and AdministrationAct 1995 (Tas) s 51(3); Aged and Infirm Persons’ Property Act 1979 (NT) s 12(1) and theGuardianship and Management of Property Act 1991 (ACT) s 8(1)(c)(ii).

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A suggested outline for medicolegal report relating to financial management isoutlined in BOX 8.12.14:

Box 8.12.4Suggested outline for report writing for assessment of ability to managefinancial affairs• Expertise : An outline of the health care professional’s background

or expertise that they are bringing to the assessment• Is there a diagnosis or disability? If so, provide basis for that

diagnosis (i.e. psychiatric history, results of mental statusexamination and cognitive assessment, and/or results ofneuropsychological testing). Why, as a result of that diagnosis mightthe person be incapable (e.g. frontal lobe/decisionmaking/planning/judgement, calculation, overspending, delusions ofpoverty or grandiosity)?

• Severity: An estimate of the severity of the disability/intellectualdisorder

• Specific testing of financial capacity: Does the person know theirassets? Can they read a bank statement? Can they use a chequebook?Can they identify currency and its relative value? May use theFinancial Capacity Instrument (8.12.3.d) as a guide to ensure alldomains are covered such as Basic Monetary skills, FinancialConceptual knowledge, Cash transactions, Chequebook management,Bank statement management, Financial judgment, Bill payment,Knowledge of personal assets/estate arrangements, InvestmentDecision making [NB Need some corroborative informationregarding assets to check veracity of responses.]

• Need and/or best interests Is there a need or is it in the best interestsof the person – depending on the jurisdiction (e.g. Can they affordfood? Do they pay crucial bills such as rent, electricity, water rates ora crucial accommodation bond)? Are they at risk of exploitation ordissipation of the estate by others? If they are unfamiliar with theirfinancial affairs or have never managed their own affairs, have theymade appropriate alternative arrangements for the management oftheir estate? Is there an alternative or informal arrangement already inplace (e.g. a family member looking after their affairs, a Power ofAttorney, an accountant)?

chapter 8 administration (financial management) of the estates … · financial management orders...

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