Statutes Amendment (Public Trustee and Litigation Guardian) Bill

Introduction and First Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (15:32): Obtained leave and introduced a bill for an act to amend the Guardianship and Administration Act 1993 and the Public Trustee Act 1995. Read a first time.

Second Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (15:32): I move:

That this bill be now read a second time.

Today, I introduce the Statutes Amendment (Public Trustee and Litigation Guardian) Bill 2023, a bill that seeks to enhance the efficiency of the office of the Public Trustee, as well as make related amendments to legislation governing the Public Advocate. The Public Trustee has an important role to safeguard and manage the estates of deceased persons and vulnerable persons who are under financial administration due to temporary or permanent mental impairment. It is important that the Public Trustee can operate in a way that is efficient and consistent with industry best practice.

Several provisions of the Public Trustee Act 1995 have been identified as requiring improvement and are addressed in this bill. The Public Trustee is empowered to invest money from estates under its control in common funds. The Public Trustee Act 1995 determines how income and capital gains and losses of the fund are distributed back to relevant estates.

Currently, capital gains and income are distributed by slightly different methods, which necessitates separate calculations and distributions. This bill would apply the same tests for distributing both types of profits so that the distribution process can be simplified and estates can be finalised more efficiently. This will not place clients in a less advantageous financial position.

The Public Trustee has obtained independent evaluation of the proposed changes to ensure that clients would not be materially disadvantaged. The evaluation concluded any difference in financial position would be negligible and that the change would be in line with industry standards and would lead to efficiency gains.

The Public Trustee is required to conduct a monthly official evaluation of common funds. Currently, this must take place on the first business day of the month. The bill changes this to the last business day of the month, as this is in line with industry practice. This change is administrative in nature and will not affect clients' financial positions.

The bill also proposes a new method for the Public Trustee to certify its authority to transact on behalf of a client that better protects clients' privacy. When undertaking its functions, the Public Trustee may be called upon to prove its authority to act on behalf of a client or a deceased estate. For example, a bank holding a client's money may seek proof of the authority before it releases the funds to the Public Trustee as part of the bank's own due diligence process or to avoid risk of liability.

Currently, the Public Trustee Act 1995 provides that third parties transacting with the Public Trustee must seek a copy of the relevant order granting the Public Trustee authority. This creates two issues in practice. First, administration orders are made by the South Australian Civil and Administrative Tribunal, which is not a court and so is not captured by this provision. Secondly, it is not always appropriate to provide third parties with copies of court or SACAT orders, as they can contain personal information about Public Trustee clients.

This bill would allow the Public Trustee to issue a certificate attesting that a court or SACAT has granted it authority as a protected person's administrator or the administrator of a deceased estate. The certificate must identify the date of the order and the scope of the authority granted. Third parties can then rely on this certificate to satisfy themselves of the regularity of a transaction with the Public Trustee, and thereafter no liability lies on the third party for relying on the certificate.

I note that the certificate only relates to the position of third parties—a certificate cannot render a transaction valid on the part of the Public Trustee if it was not actually authorised by the original order. This provision simply lets third parties transact with the Public Trustee with confidence in regard to their own obligations to satisfy themselves of the regularity of the transaction.

The bill also provides guidance to courts on whether to appoint the Public Trustee as a litigation guardian. A litigation guardian is a person who is appointed to take responsibility for a court action on behalf of a party who is under a legal incapacity, meaning a minor or an adult who has a mental incapacity. The litigation guardian interacts with the court and instructs legal counsel on behalf of the party. It is common for the Public Trustee to act as litigation guardian.

The conduct of proceedings for persons under a legal incapacity, including the process for appointing a litigation guardian, is ultimately at the discretion of the court (subject to the rules of that court). However, the bill provides statutory factors to be considered when exercising the discretion to appoint the Public Trustee as litigation guardian, to ensure a consistent approach is taken.

Factors to be taken into account are whether the litigant is already a client of the Public Trustee, the nature of the proceedings and whether there is a relative, friend or associate of the litigant who is willing and able to act as a litigation guardian. The bill also makes equivalent amendments in relation to appointment of the Public Advocate as litigation guardian, to further ensure a consistent approach.

Finally, this bill amends the Guardianship and Administration Act 1995 to provide the Public Trustee limited powers to finalise transactions after its administration has been revoked. The Public Trustee's ability to act on behalf of a client under a mental incapacity is only allowed as authorised by SACAT. If SACAT decides that the Public Trustee should no longer be administrator—either because a friend or family member is able to take on the responsibility or because the client has regained mental capacity—then the Public Trustee's powers are revoked, and it can no longer act on behalf of the client or use client funds. As a general position, this is of course entirely appropriate.

However, this can sometimes create inconvenience for both the Public Trustee and the new administrator during the process of handing over administration of the estate. If the Public Trustee had engaged a service provider on behalf of a client during its administration but not received or paid the invoice at the time its administration is revoked, it is unable to pay it, no matter how small it is. Legally, the debt belongs to the estate and so must be paid by the person responsible for the estate.

The Public Trustee must refer the creditor to the new administrator, who is responsible for arranging payment. If the debt is routine, it would be much more efficient for the Public Trustee to finalise it as part of the handover process. The bill creates a power for the Public Trustee to pay minor bills during this handover period in order to settle any routine transactions where payment was outstanding at the time administration was revoked, making the handover process smoother.

The Public Trustee must inform the person newly responsible for the estate that this has occurred and must also inform any guardian that is currently acting. This power is only allowed up to a prescribed limit to ensure it is only used for routine transactions such as storage fees or property maintenance. The limit to be prescribed will be subject to further consultation after the bill's passage, but is expected to be only a few thousand dollars. I look forward to the passage of the bill and commend the bill to members. I seek leave to have the explanation of clauses inserted in Hansard without my reading it.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Guardianship and Administration Act 1993

3—Insertion of section 41A

This clause inserts new section 41A into the Guardianship and Administration Act 1993 as follows:

41A—Public Trustee may retain money to pay outstanding debts etc

This section allows the Public Trustee to retain money belonging to a protected person to apply in or towards the payment of any debts, obligations or liabilities of the protected person, or incurred by the Public Trustee in the exercise of powers or duties under Part 4 Division 3 of the Act, that are outstanding at the time the administration order appointing the Public Trustee as administrator (of all or part of the protected person's estate) is revoked or the protected person dies.

The section restricts the amount that may be retained to the amount the Public Trustee considers is reasonably required or the amount prescribed by the regulations, whichever is less. It requires the Public Trustee to notify the person who takes over control and management of all or part of the protected person's estate and the guardian of the protected person (if any) of the amount retained and the nature of the outstanding debts, obligations or liabilities. The Public Trustee is required to apply the money in or towards the payment of the outstanding debts, obligations or liabilities and provide any money retained in excess of those debts, obligations or liabilities to the person taking over control and management of all or part of the estate as soon as reasonably practicable.

4—Insertion of section 83

This clause inserts new section 83 into the Guardianship and Administration Act 1993 as follows:

83—Matters to consider when deciding whether to appoint Public Advocate as litigation guardian

This section sets out the matters a court or tribunal must consider in determining whether the Public Advocate should act as litigation guardian for a person in a proceeding.

Part 3—Amendment of Public Trustee Act 1995

5—Amendment of section 28—Money from several estates may be invested as one fund

This clause amends section 28 of the principal Act to remove the requirement for the period of each investment to be taken into account when dividing income arising from investment of money from more than one estate under the Public Trustee's control as one fund between estates.

6—Amendment of section 29—Common funds

This clause amends section 29 of the principal Act to remove the requirement for the period of each investment to be taken into account when dividing income arising from the investment of a common fund between investors.

It also changes the day on which the value of each common fund is to be determined to the last business day of the month (currently the first business day of the month) for the purposes of effecting investments in and withdrawals from a common fund and for the purposes of calculating the maximum monthly management fee that may be charged by the Public Trustee for managing the fund.

7—Amendment of section 44—Fee for administering perpetual trust

This clause amends section 44 of the principal Act to change the day on which the value of a perpetual trust is determined to the last business day of the month (currently the first business day of the month) for the purposes of calculating the maximum monthly administration fee that may be charged by the Public Trustee for administering the trust.

8—Amendment of section 54—Indemnity to persons having dealings with Public Trustee

This clause amends section 54 of the principal Act to allow the Public Trustee to provide a person entering into a transaction with the Public Trustee with a certificate certifying that the Public Trustee has been given certain authority by the Supreme Court or SACAT, rather than the order or a copy of the order giving the authority. It sets out the information the certificate must include.

9—Insertion of section 54A

This clause inserts new section 54A into the Public Trustee Act 1995 as follows:

54A—Matters to consider when deciding whether to appoint Public Trustee as litigation guardian

This section sets out the matters a court or tribunal must consider in determining whether the Public Trustee should act as litigation guardian for a person in a proceeding.

10—Transitional provision

This clause is a transitional provision in respect of the amendments to section 54 of the Public Trustee Act 1995.

Debate adjourned on motion of Hon. B.R. Hood.