An Analysis of AC [2024] WASAT 146
1. Introduction
The decision in AC [2024] WASAT 146 addresses a problem of increasing practical significance for guardianship and administration practitioners in Western Australia: how to structure Tribunal orders when a represented person’s estate includes a self-managed superannuation fund (SMSF) and the interplay between the Guardianship and Administration Act 1990 (WA) and the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) creates constraints on the form and scope of administration orders.
The decision is notable for three reasons. First, it provides a worked example of the Tribunal varying an EPA under s 108 of the GA Act to carve out a limited role for an attorney alongside a Public Trustee appointment. Second, it applies the conflict of interest provisions in s 44(1)(b) to a partner who had used a power of attorney to purchase property in her own name with the represented person’s funds. Third, it addresses the evidentiary weight of estate planning documents executed when the represented person’s capacity was in question.
The decision warrants attention beyond the immediate parties because the combination of an SMSF, a corporate trustee, and an incapacitated member is a scenario that will arise with increasing frequency as the population ages. Practitioners advising families in these circumstances need to understand the structural limitations of the Public Trustee’s powers and the mechanisms available under the GA Act to address them.
2. Relevant Legal Framework
The Guardianship and Administration Act 1990 (WA)
The GA Act provides for the appointment of guardians and administrators for persons who, by reason of a mental disability, are unable to make reasonable judgments about their person or estate. The guiding principles in s 4 establish a presumption of capacity, require that orders be made only where necessary, and mandate the least restrictive intervention consistent with the represented person’s needs. The primary consideration in all proceedings is the best interests of the represented person, and the Tribunal must ascertain the wishes of the represented person as expressed or gathered from past actions (s 4(7)).
Section 43 provides for the appointment of a guardian where the Tribunal is satisfied that a person is incapable of looking after his or her own health and safety, unable to make reasonable judgments in respect of matters relating to his or her person, and in need of oversight, care, or control. Section 44(1) requires that a proposed guardian has consented, will act in the best interests of the represented person, is not in a position where his or her interests conflict or may conflict with those of the represented person (s 44(1)(b)), and is otherwise suitable.
Section 64(1) provides for the appointment of an administrator where the Tribunal is satisfied that a person is unable, by reason of a mental disability, to make reasonable judgments in respect of matters relating to all or any part of his or her estate, and is in need of an administrator. Section 65 confers an interim power, enabling the Tribunal to exercise such powers as may be necessary for the protection of a person’s estate pending determination of the question whether an administration order should be made.
Enduring Powers of Attorney and s 108
Part 9 of the GA Act governs enduring powers of attorney. Section 105 provides that an EPA created under the Act survives the incapacity of the donor. Section 106 empowers the Tribunal to declare that a donor does not have legal capacity and to bring an EPA into force.
Section 108 is of central importance to this decision. Subsection (1) provides that where the Tribunal makes an administration order or an order under s 65 or s 66, the Tribunal may revoke or vary an EPA. Subsection (1a) goes further: where the continued operation of an EPA would be inconsistent with the functions of the administrator, the Tribunal shall revoke the power or vary it to remove the inconsistency. Subsection (2) provides that where an administrator is appointed, the donee of the EPA is accountable to the administrator as if the administrator were the donor, and the administrator has the same power to vary or revoke the EPA as the donor would have if of full legal capacity.
The Superannuation Industry (Supervision) Act 1993 (Cth)
Section 17A of the SIS Act prescribes requirements for SMSFs. A fund is an SMSF only if each member is a trustee (or, where the trustee is a body corporate, a director of the trustee). Section 17A(3)(b)(ii) provides an exception: a member who is under a legal disability is not required to be a trustee or director if the member’s “legal personal representative” is a trustee or director in the member’s place. The SIS Act defines “legal personal representative” to include a person who holds an EPA in respect of a member of the fund.
Related Case Law
The Tribunal referred to two earlier decisions. In FY [2019] WASAT 118, the Tribunal considered the assessment of a person’s ability to make reasonable judgments about their estate by reference to their actual estate. In SAL and JGL [2016] WASAT 63, the Tribunal defined “estate” broadly to encompass the aggregate of a person’s property, assets, liabilities, and the entirety of their real and personal property and financial affairs.
3. The Facts of the Case
The represented person and his estate
AC was an 87-year-old retired businessman with a diagnosis of vascular dementia (at [1]). His estate was large and complex, comprising commercial properties (some rented), real property, bank accounts and term deposits in his sole name, a company ([redacted] Investments Pty Ltd) of which he was the sole shareholder and sole director, and an SMSF ([redacted] Superannuation Fund) of which the company was the corporate trustee (at [71]–[72]).
The medical evidence was extensive and consistent. AC had been diagnosed with vascular dementia in July 2023. His MMSE score was 15/30 in October 2023, declining to 3/10 by November 2023 and 5/30 by February 2024 (at [24]–[27]). He required full assistance with all activities of daily living, could not communicate, and had no insight into his personal care needs (at [25]–[28]).
The parties and their competing interests
MC, the applicant, described herself as AC’s de facto partner from 30 November 2020. She had previously worked as his cleaner and then became his carer during the COVID-19 pandemic (at [16]). She sought her own appointment as plenary guardian and administrator.
RC, AC’s son, held an EPA made on 23 May 2017 as part of a broader estate planning exercise that included a will with testamentary trust, a binding death benefit nomination, and an enduring power of guardianship (EPG) (at [33]–[34]). The 2017 EPA was unrestricted in its terms and styled to come into force only on a declaration by the Tribunal that AC lacked legal capacity (at [31]).
The relationship between MC and RC was acrimonious. A brief reconciliation at the second hearing in June 2024 collapsed before the third hearing in August 2024, with each opposing the other’s appointment in any form (at [14]).
The power of attorney and the property purchase
AC had made a general power of attorney in favour of MC in October 2022, but its terms specified that it did not survive his loss of capacity (at [8], [30]). Using that power, MC withdrew funds from a term deposit in AC’s sole name and purchased a property in her own name in January 2024. Her explanation was that the purchase “perfected” a gift AC had made when he undertook to redevelop her property, which had been demolished, but the redevelopment was abandoned due to problems with the builder (at [102]–[104]).
The SMSF compliance problem
The Public Trustee’s solicitor identified a significant compliance issue. On AC’s loss of capacity, his position as sole director of [redacted] Investments was vacant (at [74]–[75]). The SMSF was at risk of non-compliance with s 17A of the SIS Act because neither a trustee nor a director of the corporate trustee was a member or the legal personal representative of a member (at [74]). The Public Trustee submitted that it could not act as a director of the company (at [77], [90]).
Procedural history
The matter was heard across three hearings on 13 March, 19 June, and 28 August 2024. At the first hearing, MC was appointed limited guardian with functions in treatment and services, and the Public Trustee was appointed under s 65 on an interim basis (at [5], [10]). The administration application was adjourned for further information. RC’s application under s 106 to bring the 2017 EPA into force was filed on 17 July 2024 (at [3]). The reasons were delivered orally on 28 August 2024 and published on 1 April 2026 following AC’s death and applications for access to documents (preamble to the reasons).
4. Analysis of the Tribunal’s Reasoning
Displacement of the presumption of capacity
The Tribunal’s finding on capacity was straightforward. Member Child was satisfied on the medical evidence that AC had a significant cognitive impairment, impaired memory, and was dependent on others for all aspects of personal care and management of his affairs (at [48]). The diagnosis of vascular dementia established the “mental disability” required by s 64(1)(a), and the complexity of AC’s estate – assessed by reference to his actual estate in accordance with FY [2019] WASAT 118 – meant he lacked the intellectual ability to make the decisions required for its management (at [50]–[52]).
Guardianship: the conflict of interest under s 44(1)(b)
The more instructive aspect of the reasoning concerned the suitability of MC for appointment as guardian. The Public Advocate submitted that MC was in a position of conflict because she had potentially breached her obligations as attorney and may therefore be liable to AC’s estate (at [63]). The Tribunal accepted this submission and found that the conflict related “in particular” to the property of the represented person (at [63]).
The Tribunal’s approach was to disaggregate the guardian’s functions. MC was found suitable to exercise treatment and restrictive practices functions, as she was the primary carer and familiar with AC’s medical needs, and there was no conflict in that role (at [69]–[70]). However, the conflict precluded her appointment for accommodation and services decisions. The Public Advocate was appointed limited guardian for those functions, with the additional function of seeking information from health professionals and providing it as necessary to advance AC’s best interests (at [64]–[65], [70]).
RC was found unsuitable for appointment as guardian because of his limited involvement in AC’s direct care and his lack of knowledge of AC’s current circumstances (at [67]–[68]).
Administration: the EPA and SMSF compliance solution
The Tribunal’s reasoning on the administration order was shaped by the structural limitation that the Public Trustee could not act as a director of [redacted] Investments (at [77], [90]). This meant that the appointment of the Public Trustee as plenary administrator – the outcome sought by MC – would not resolve the SMSF compliance problem.
The solution adopted was a composite one. The 2017 EPA was brought into force under s 106, but varied under s 108(1) and s 108(1a) to confine the attorney’s powers to four specified matters: rights and functions as a member or beneficiary of the SMSF; the office of trustee of the Fund; the office of director of the company in its capacity as trustee; and the management of specified commercial properties (at Orders 3–4). The Public Trustee was appointed limited administrator with plenary authority save for those reserved powers (at Order 5).
The legal reasoning proceeds in steps. First, the Public Trustee’s submission was that the SIS Act definition of “legal personal representative” includes a person who holds an EPA in respect of a member – and that a limited administrator may not qualify (at [78]–[79]). Second, s 108(1a) requires the Tribunal to vary an EPA to remove any inconsistency with the administrator’s functions. Third, the variation was drafted to limit the EPA to those functions that the Public Trustee could not perform, thus avoiding the inconsistency while maintaining SIS Act compliance (at [80], [89]–[93]).
The 2022 documents and the question of wishes
The Tribunal addressed the competing evidence of AC’s wishes with care. The 2022 will referred to estrangement from RC commencing in 2015, but this was inconsistent with the 2017 estate planning documents by which AC appointed RC as his attorney and guardian (at [84]). The Public Advocate submitted that questions arose about AC’s capacity to give instructions in 2022, given these anomalies (at [85]). The Tribunal concluded that it could not place weight on the 2022 will as a true reflection of AC’s wishes (at [108]).
Conversely, the 2017 EPA was made before any suggestion of cognitive impairment and as part of a comprehensive estate planning exercise conducted through solicitors (at [88]). The Tribunal treated it as an expression of AC’s wishes at a time when his capacity was not in question.
5. Assessing the Consequences
Structural consequences of the orders
The orders made in AC created a tripartite decision-making structure: MC as limited guardian for treatment and restrictive practices; the Public Advocate as limited guardian for accommodation, services, and information-sharing; and a split administration between RC as attorney (for the SMSF, corporate trustee, and specified properties) and the Public Trustee as limited administrator (for all other aspects of the estate, including day-to-day maintenance, investigation of the alleged misappropriation, and any litigation).
Practical implications for SMSF compliance
The decision demonstrates that where an SMSF member loses capacity and the fund’s corporate trustee has only one director (the member), the fund will be non-compliant unless the member’s legal personal representative is appointed as a trustee or director. Because the Public Trustee cannot act as a director of a private company, an EPA is the most practical mechanism to achieve compliance. If no EPA exists, or if it does not extend to SMSF-related functions, the fund may face prolonged non-compliance and regulatory consequences.
Implications of the alleged misappropriation
The Tribunal found that MC’s purchase of property in her own name using AC’s funds, while holding a general power of attorney and acknowledging AC’s incapacity, may amount to a breach of fiduciary duty (at [105]). The Public Trustee’s appointment was directed in part at investigating this allegation (at [94], [99], [105]). MC remains accountable to the Public Trustee, who holds the same power to vary or revoke the EPA as the donor would have at full capacity (s 108(2)).
Financial consequences
The orders directed RC as attorney to place the Public Trustee in funds and to reimburse costs and expenses from AC’s resources (at Order 7). The Public Trustee was authorised to apply AC’s funds for the maintenance and benefit of both AC and MC (at Order 8). The maximum review period of five years was imposed given the progressive nature of AC’s condition (at [111]).
6. Worked Example
Consider the following hypothetical, adapted from the facts of AC.
Scenario: David, aged 82, is diagnosed with moderate Alzheimer’s disease. He is the sole member, sole shareholder, and sole director of DK Pty Ltd, the corporate trustee of his SMSF. The SMSF holds two commercial properties and a share portfolio worth a total of $3.2 million. David’s personal estate includes a residential property, bank accounts, and term deposits worth approximately $1.5 million. David made an EPA in 2018 appointing his daughter, Emma, as his sole attorney, but the EPA is unrestricted and does not specifically reference the SMSF or the company. David’s second wife, Fiona, has been his primary carer for the past four years. Fiona applies for her appointment as plenary guardian and administrator.
Analysis from Fiona’s perspective (applicant)
Fiona’s strongest case is for appointment as guardian with treatment and care-related functions, given her role as primary carer. However, following AC, if there is any allegation that Fiona has used David’s funds for her own benefit, or any basis for suggesting a conflict of interest, s 44(1)(b) may preclude her appointment for accommodation and financial decisions. Fiona’s application for plenary administration is unlikely to succeed if the estate includes an SMSF, because she cannot resolve the compliance issue unless she holds an EPA.
Analysis from Emma’s perspective (attorney)
Emma’s position is that the 2018 EPA should be brought into force under s 106 and should operate as a less restrictive alternative to administration. However, following AC, the Tribunal is unlikely to accept that an unrestricted EPA can operate on its own where there is family conflict and the estate is complex. The probable outcome is a variation of the EPA under s 108 to confine Emma’s powers to SMSF-related functions (and perhaps property management), with the Public Trustee appointed as limited administrator for the balance of the estate.
The SMSF compliance pathway
The practitioner advising Emma should ensure the s 106 application is filed promptly, as the SMSF is non-compliant from the date David’s directorship is vacant. The proposed variation of the EPA should be drafted to expressly address s 17A of the SIS Act and to include authority to act as a director of DK Pty Ltd in its capacity as trustee. The variation should mirror the formulation in the AC orders, specifying the attorney’s authority in relation to membership and beneficial interests, the office of trustee, the office of director, and any ancillary powers required.
7. Practitioner Guidance: A Step-by-Step Framework
The following framework is derived from the Tribunal’s approach in AC and is intended for practitioners advising clients where the represented person’s estate includes an SMSF with a corporate trustee.
Identify the SMSF structure early. At the outset of any guardianship or administration matter, ascertain whether the represented person is a member of an SMSF and, if so, the identity and structure of the trustee. If the trustee is a body corporate and the represented person is the sole director, the compliance problem identified in AC will arise on loss of capacity (at [74]–[75]).
Locate and assess existing estate planning instruments. Determine whether there is an EPA in force or capable of being brought into force, an EPG, a will with testamentary trust, and a binding death benefit nomination. Note the terms and date of execution of each instrument. If the EPA is unrestricted, it will likely require variation under s 108 if an administration order is also made (at [80], [101]).
Assess the Public Trustee’s capacity to act. Confirm whether the Public Trustee is able to act as a director of the corporate trustee. The position in AC was that the Public Trustee could not do so (at [77], [90]). If this remains the position, the EPA is the primary mechanism for achieving SMSF compliance.
File a s 106 application promptly. If the EPA is styled to take effect only on a Tribunal declaration, file the s 106 application as early as possible. Delay extends the period of SMSF non-compliance. The application should be accompanied by a minute of proposed orders that addresses the variation required under s 108 (at [40]).
Draft the EPA variation with specificity. The variation should expressly address the attorney’s authority in relation to: (a) rights as a member or beneficiary of the fund; (b) the office of trustee; (c) the office of director of the corporate trustee, including the power to appoint a director; and (d) management of any real property held by the fund or specified in the EPA. The formulation in the AC orders provides a precedent (at Orders 3–4).
Address potential conflicts of interest. Assess whether any proposed guardian or administrator has a conflict of interest under s 44(1)(b). If the partner or carer has used the represented person’s funds for personal benefit, this will likely disqualify them from appointment for financial or accommodation functions, even if they remain suitable for treatment decisions (at [63], [69]–[70]).
Consider the role of the Public Advocate. Where there is family conflict, the Public Advocate may be the appropriate appointee for accommodation and services decisions, and for information-sharing functions that reduce tension between the parties (at [64]–[65], [70]).
Prepare for accountability obligations. Advise the attorney that under s 108(2), they are accountable to the administrator as if the administrator were the donor. The administrator has the power to vary or revoke the EPA. The attorney should maintain detailed records of all transactions and decisions made under the EPA (at [110]).
8. Evidence and Arguments Available to Each Side
For the applicant seeking appointment as guardian and/or administrator
The applicant in a comparable matter should lead evidence of their role as primary carer, familiarity with the represented person’s medical needs, and the practical difficulties of managing care without formal legal authority. The letter from the dementia support specialist in AC was relied upon in support of the initial guardianship order (at [17]–[18]). Evidence of cohabitation and the nature of the relationship will be relevant to the question of suitability.
However, the applicant must address any allegation of conflict of interest squarely. If the applicant has used the represented person’s funds for personal benefit, an explanation should be prepared in advance, supported by documentary evidence. The Tribunal in AC considered MC’s explanation that the property purchase “perfected” an earlier gift, but found a prima facie breach of fiduciary duty (at [103]–[105]). An applicant in this position should consider whether a regularisation proposal (such as returning equivalent value to the estate) can be advanced.
For the attorney seeking to act under an EPA
The attorney should demonstrate knowledge of the represented person’s estate and financial affairs. In AC, RC’s detailed understanding of his father’s financial affairs at the second hearing was a factor in the Tribunal’s satisfaction that he could operate under the EPA (at [97]). The attorney should file a minute of proposed orders early, addressing the s 108 variation and the SMSF compliance mechanism. Expert evidence or submissions on the SIS Act requirements may assist.
The attorney should also address any allegation that the represented person’s wishes have changed since the EPA was made. The Tribunal’s approach in AC was to give weight to the 2017 estate planning documents (made with legal advice and at a time of unquestioned capacity) over the 2022 will and power of attorney (made at a time when capacity was doubtful and the content was internally inconsistent) (at [84]–[85], [108]).
For the Public Advocate or Public Trustee
The Public Advocate’s role in AC was critical. The investigator’s reports provided the evidentiary foundation for the conflict of interest finding and the recommendation for an independent administrator. Practitioners should consider requesting a referral to the Public Advocate for investigation where allegations of financial mismanagement are made, as the Public Advocate’s report carries significant weight with the Tribunal.
The Public Trustee’s submissions on the SIS Act were determinative of the form of the orders. Practitioners acting for or against the Public Trustee should be prepared to address the structural limitations of the Public Trustee’s powers and the interaction with Commonwealth superannuation legislation.
9. Key Takeaways for Legal Practice
The Public Trustee cannot act as a director of a private company. This structural limitation means that where an SMSF is held through a corporate trustee and the represented person is the sole director, the Public Trustee alone cannot bring the fund into compliance with s 17A of the SIS Act. An EPA is the most practical alternative mechanism (at [77], [90]).
Section 108 of the GA Act mandates variation of an EPA where inconsistency arises with an administration order. The obligation under s 108(1a) is mandatory (“shall”). Practitioners must draft the EPA variation with sufficient specificity to delineate the attorney’s powers from the administrator’s functions, avoiding overlap and potential conflict (at [101]).
An EPA holder may qualify as a “legal personal representative” under the SIS Act. Section 17A(3)(b)(ii) of the SIS Act permits a legal personal representative to act as trustee or director in place of an incapacitated member. A person holding an EPA satisfies this definition, whereas there is doubt whether a limited administrator would (at [78]–[79]).
Conflict of interest under s 44(1)(b) can be addressed by disaggregating guardian functions. A person may be suitable for appointment as guardian with some functions (such as treatment) but disqualified from others (such as accommodation) where there is a conflict. The Tribunal’s approach in AC was to split functions between the partner and the Public Advocate (at [69]–[70]).
Use of a donor’s funds to purchase property in an attorney’s own name raises a prima facie breach of fiduciary duty. Even where the attorney offers an explanation (such as perfecting an earlier gift), the Tribunal may find the conduct gives rise to a conflict warranting an independent investigation by the Public Trustee (at [102]–[105]).
Estate planning documents executed when capacity is questionable may be given reduced weight. The Tribunal in AC declined to place weight on the 2022 will because of internal inconsistencies and doubts about the represented person’s capacity at the time of execution, preferring the 2017 instruments made with legal advice and at a time of unquestioned capacity (at [84]–[85], [108]).
An enduring power of guardianship that cannot be produced in completed form cannot operate as a less restrictive alternative. The GA Act requires execution and a signed acceptance. Where the completed document cannot be produced, the Tribunal will not rely on it as a basis for declining to make a guardianship order (at [58]–[59]).
Estate planners should ensure EPAs specifically address SMSF functions. The compliance problem in AC could have been mitigated at the planning stage if the 2017 EPA had expressly addressed the attorney’s authority in relation to the SMSF, the corporate trustee, and the directorship. Practitioners drafting EPAs for clients with SMSFs should include these provisions as a matter of course.
The involvement of a neutral administrator can reduce family conflict. The Tribunal’s approach of appointing the Public Trustee to manage day-to-day finances and maintenance – removing the attorney’s responsibility to provide an allowance to the partner – was directed at reducing contact points for conflict between family members (at [96], [107]).
10. Conclusion
AC [2024] WASAT 146 provides important guidance at the intersection of state guardianship legislation and Commonwealth superannuation regulation. Where a represented person’s estate includes an SMSF with a corporate trustee, the appointment of an administrator alone may not resolve compliance issues under the SIS Act. The Tribunal’s use of s 108 to vary an EPA – confining the attorney’s powers to SMSF-related functions while appointing the Public Trustee for the balance of the estate – provides a workable template for analogous cases.
The decision also reinforces the significance of the conflict of interest provisions in s 44(1)(b) and the Tribunal’s willingness to disaggregate guardian functions to manage conflicts. Practitioners should be alert to the possibility that a person who is suitable for one category of guardian function may be disqualified from another.
For estate planners, the decision underscores the importance of drafting EPAs with sufficient specificity to address SMSF-related functions, corporate trustee directorships, and the interaction with Commonwealth legislation. An EPA that does not address these matters may require variation by the Tribunal at a time of family conflict – a situation that careful planning could avoid.
Note: All names used in this article are pseudonyms assigned by the Tribunal. The judgment was published under those pseudonyms in accordance with the standard practice of the State Administrative Tribunal in proceedings brought under the Guardianship and Administration Act 1990 (WA) to protect the privacy of the represented person. No details in this article identify or are intended to identify any party, witness, or associated person.