In guardianship matters, the issue of preserving a represented person's testamentary intentions as reflected in their Will can be quite complex.
A decision by the State Administrative Tribunal of Western Australia, JEB [2016] WASAT 65, sheds light on the role of the Tribunal in such cases, particularly when it comes to making directions regarding the way funds are held by administrators.
In this blog post, I delve into the key aspects of the JEB case and examine the Tribunal's approach in balancing the best interests of the represented person while preserving their testamentary wishes.
Case Summary: JEB [2016] WASAT 65
In JEB [2016] WASAT 65, the Public Trustee sought the removal of the existing family member joint administrators and also certain directions as to the way in which funds from the sale of certain assets of the estate should be held. Assets specifically gifted by the represented person in her Will had been sold by the administrators who were unaware of the existence of the Will. The Public Trustee was the executor of the Will.
The Tribunal appointed the Public Trustee as plenary administrator and made the directions sought by the Public Trustee regarding the separation of the proceeds of sale from the balance of the estate and their quarantining from use in inter vivos expenditure until the balance of the represented person's funds were depleted.
The Tribunal found that affordable actions taken to maximize the chances that a represented person's testamentary wishes as reflected in a Will are able to be carried out constitutes acting in their best interests, even if it represents a financial cost to their estate inter vivos, and that it is a matter of balance for the administrator to determine depending upon the circumstances of the person and their estate.
Relevant Case Law
The Public Trustee relied on the case of Re Hartigan; ex parte The Public Trustee in the State of Western Australia (unreported, Supreme Court of Western Australia, 9 December 1997, Library No. 970736) (Re Hartigan) to support the proposition that if real estate is sold by an administrator and the testator is not capable of changing his or her will, then the gift of real estate is not automatically adeemed. The devisee is instead entitled, at face value, to the proceeds of sale. Re Hartigan followed a case of Re Viertel [1997] 1 Qd R 110 (Re Viertel).
However, there was some disagreement in the case law as to whether the principles in Re Hartigan still apply and, if so, how. The Tribunal referred to Simpson v Cunning [2011] VSC 466 (Simpson) and RL v NSW Trustee and Guardian [2012] NSWCA 39 (RL) as cases expressing doubts about the state of the law and calling for legislative intervention.
Legislative Provisions
The Guardianship and Administration Act 1986 (Vic) contained provisions addressing ademption of property when there was an administrator appointed under that Act. However, there was no similar provision covering when there was an enduring power of attorney.
The Guardianship and Administration Act 2000 (Qld) allowed the Supreme Court of Queensland to award compensation for loss of benefits in an adult's estate due to a sale or other dealing with the adult's property by an administrator, but there was no such provision in the GA Act.
Tribunal's Findings
The Tribunal in JEB [2016] WASAT 65 was satisfied that the represented person was a person for whom orders could and should be made. The Tribunal appointed the Public Trustee as the administrator of last resort and made the directions sought by the Public Trustee regarding the handling of the proceeds from the sale of the specifically gifted assets.
In making its decision, the Tribunal acknowledged the complexities and uncertainties in the current state of the law regarding ademption of specifically gifted assets when they are sold by an administrator. Despite the doubts expressed in cases like Simpson and RL, the Tribunal found that the principles in Re Hartigan and Re Viertel were applicable in the present case. Thus, the devisee was entitled to the proceeds of sale for the gifted assets.
The Tribunal emphasized that while the best interests of the represented person should be the primary concern of an administrator, preserving the person's testamentary intentions was also an important consideration. The Tribunal recognized that ensuring the represented person's wishes were upheld may sometimes come at a cost to their estate during their lifetime. However, the Tribunal held that it was a matter of balance and that affordable actions taken to maximize the chances of fulfilling the person's testamentary wishes were in their best interests.
Key Take-Aways
The JEB [2016] WASAT 65 case highlights the Tribunal's role in guardianship matters, where preserving testamentary intentions is a key concern.
The decision provides valuable insight into how the Tribunal may approach such cases, balancing the best interests of the represented person and their testamentary wishes, even when the law is unclear.
The case also serves as a reminder of the importance of legislative intervention to provide clearer guidance for administrators and the courts when dealing with ademption of specifically gifted assets. In the absence of clear legislative provisions, the Tribunal's approach in JEB [2016] WASAT 65 provides a valuable example of how the courts may navigate the complexities and uncertainties in the current state of the law.