Statutes Amendment (Public Trustee and Litigation Guardian) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 30 November 2023.)

The Hon. J.M.A. LENSINK (16:19): I rise to indicate support for this particular bill and note that the Liberal Party has filed amendments to it. I think at the outset it is fair to say that the roles of the Public Trustee and indeed the Public Guardian as statutory office holders are very important, particularly for vulnerable South Australians and those in particular who do not have family, friends or the like to assist them in their decision-making, whether it be in a financial context or in terms of a major life decision such as determining where they should live and the like, so I would like to thank those statutory office holders and indeed the staff who work in their offices for all the work they do on behalf of vulnerable South Australians who need that level of assistance with managing their personal affairs.

This particular bill makes some adjustments to the operation of the Public Trustee. I understand these changes were requested by the Public Trustee. I will speak to those and then I will speak to the Liberal Party's amendments. I note that there is a letter from the Law Society, which provides some feedback on the legislation as well.

This bill makes five distinct amendments to the operation of the Public Trustee. Firstly, for the Public Trustee to be able to finalise any outstanding payments after the revocation of their administrative role, which is probably most commonly after the person has passed away. This would allow for the Public Trustee to retain money belonging to a person over whom it has guardianship or administration, and the money would be applied to pay any incidental liabilities of the person or costs incurred by the Public Trustee as a result of an administration order. The section restricts the amount of money to be held by the Public Trustee to either what the Public Trustee considers is reasonably required or an amount prescribed by regulations, whichever is less.

Secondly, clause 5 and part of clause 6 of the bill simplify the way income from investments of the trustee are distributed. Currently, the Public Trustee must calculate the income from any money invested based on the period of the investment for any individual funds, which I understand is a lengthy calculation and differs from the way the Public Trustee distributes capital gains. The clause removes that requirement, and the government has advised our shadow attorney-general, the member for Heysen in another place, that evaluation of the change was procured by Deloitte, which concluded that any difference in the financial position of clients would be negligible, but the change would lead to an efficiency gain.

Thirdly, clause 7 and part of clause 6 change the day on which the value of investments is determined from the beginning of the month to the end of the month. Fourthly, clause 8 allows the Public Trustee to provide a third party with a certificate of authority certifying that the Public Trustee has the authority to act on behalf of a client rather than provide a copy of the order given by the Supreme Court or SACAT, as they could contain personal information about Public Trustee clients.

The matters which the Liberal Party is seeking to amend relate to the matter of the litigation guardian. The Law Society does hold a couple of concerns in relation to this bill. The first is the amount of moneys to be retained by the Public Trustee to finalise outstanding payments after the revocation and administration, which we have been advised would be small and routine debts. The Law Society, in its letter, has stated that it has some concerns about the prescribed amount. As they say in their letter to the Attorney-General:

If the prescribed amount is several hundred or a few thousand dollars, the Committee—

that is of the Law Society—

considered the proposal to be reasonable. However, in the event that the quantum of the prescribed amount is significant, the Committee suggested the inclusion of a mechanism to exclude the exercise of the power where the administration of the Public Trustee has ended in circumstances where the appropriateness of that administration is in question.

I will ask the minister some questions in relation to that, particularly in relation to the regulations and what the progress is there. Regarding the Public Trustee as litigation guardian, according to the letter from the Law Society the current position is that:

In the professional experience of Members of the Civil Litigation Committee there is a general reluctance on the part of the Public Trustee to be appointed as a litigation guardian. The Members' experience has been that the Public Trustee will only agree to be appointed when satisfied that there is no family member, relative or friend available to act as a litigation guardian.

This is often referred to as a position of last resort. The letter continues:

Once agreement of the Public Trustee to be a litigation guardian is obtained and the guardian certificate is signed, an application is made to the Court for the approval, which is understood to be generally a straightforward process.

…the Public Trustee is an eligible person to act as litigation guardian and as such, the Committee considered the Court does not need to turn its mind to matters set out in proposed section 54A—

which are as follows. Clause 54A provides:

Matters to consider when deciding whether to appoint Public Trustee as a litigation guardian.

These include whether there is a relative, friend or associate of the person who is willing and able to act and whether, in all circumstances and taking into account the nature of the litigation, the Public Trustee is the most appropriate person. The Law Society makes the point, and the Liberal Party agrees, that given that the Public Trustee is the position of last resort this is a process that takes place already. As the Law Society puts it:

…54A will lead to the Court requiring the practitioner—

that is, a lawyer on behalf of somebody who is vulnerable—

to depose why the Public Trustee is the appropriate litigation guardian and that all other avenues have been exhausted.

What, effectively, clause 9 is going to do, as the Law Society outlines it, is make it harder for the Public Trustee to be appointed to this role, when we consider that these are vulnerable people who in any event do not have relatives or others who are able to act for them. It will put another roadblock in the way of having the vulnerable person have the Public Trustee appointed, which may, if they do not have someone to act on their behalf, leave them quite vulnerable to not being able to manage their financial affairs and the like.

We consider that these amendments will mean that a lawyer, whether it is someone who is appointed for them through the Legal Services Commission or whether somehow—it is hard to envisage that they would have private legal counsel, given that a lot of these people are entirely reliant on Centrelink.

The Liberal Party considers that this new 54A is going to be problematic, in that it is going to mean more work on behalf of the person in question and their legal counsel, and it will mean that the court is going to have to go through seeking and testing evidence and the like when in fact the existing position is already that the Public Trustee is the position of last resort. With those comments, we support the rest of the legislation. We will be dividing on the amendments.

The Hon. S.L. GAME (16:29): I rise in support of the Statutes Amendment (Public Trustee and Litigation Guardian) Bill 2023, which amends two South Australian acts: the Guardianship and Administration Act 1993 and the Public Trustee Act 1995.

The bill makes changes to the Guardianship and Administration Act by granting the Public Trustee the authority to hold onto money from a protected person's estate even after the administration order ends or the person dies. This money would be used to cover any outstanding debts or liabilities. It also establishes factors for a court or tribunal to consider when deciding if the Public Advocate should be appointed as a litigation guardian for someone in a legal proceeding.

Changes to the Public Trustee Act allow the Public Trustee to invest funds from multiple estates together. The bill modifies the wording in various sections related to fees, investment periods and record keeping for the Public Trustee. It grants the Public Trustee the ability to provide a certificate to verify their authority instead of a court order in certain situations.

Similar to the changes in the Guardianship and Administration Act, the bill outlines factors for a court or tribunal to consider when deciding if the Public Trustee should be appointed as a litigation guardian. Overall, the bill strengthens the Public Trustee's ability to manage estates efficiently and clarifies procedures for appointing litigation guardians.

The Hon. M. EL DANNAWI (16:30): I rise to speak in support of the Statutes Amendment (Public Trustee and Litigation Guardian) Bill. This bill contains a number of proposed changes that have arisen from suggestions made by the Public Trustee and Public Advocate to the Attorney-General's Department.

Both of these offices provide an essential service to our community. The Public Advocate helps to carry out laws that relate to adults who are deemed unable to make decisions for themselves, who are at risk of abuse or neglect and may require supported or substitute decision-making. They offer guardianship, investigation and advocacy services, dispute resolution and information.

The Public Trustee also works to provide services to eligible persons who cannot manage their own affairs. They provide financial and administrative services to those who have trusted them to assist. They offer deceased estate administration and trusts primarily but have expanded their responsibilities to provide personal financial assistance.

South Australia has the highest proportion of older people on mainland Australia. As this sector of our population continues to age, these offices have an increased role to play to assist families and are working hard to make sure they can meet the needs of our community. For example, last year the Public Advocate announced that over the last two years they had been involved in a project to bring Eldercaring Coordination to SA, in collaboration with Relationships Australia, UniSA and the Association for Conflict Resolution in the US.

Eldercaring Coordination is a dispute resolution process especially created for families experiencing conflict regarding the care, autonomy and safety of older adults. It equips families with the tools they need to communicate effectively, reinforce the older person's voice and helps them to become more focused on how they can meet the needs of the elder.

The Public Trustee and Public Advocate are incredibly valuable community services. The amendments in this bill will enhance the efficiency of both offices. The Public Trustee is empowered to invest money from estates under its control into common funds. The bill changes the way the profits of that money are distributed, unifying the method by which capital gains and income from the fund are distributed to relevant estates.

The bill would apply the same test for distributing each type of profit, which simplifies the distribution process and will in turn result in a more efficient distribution to clients. The bill also changes the required monthly evaluation of common funds from the first to the last business day of the month, which is in line with industry standards.

Arising directly from difficulties the Public Trustee has had in engaging with third parties, the bill also provides for a simplified method to provide proof of authority to act on their clients' behalf. The bill allows the Public Trustee to sign a certificate asserting authority and to provide this to any third parties, such as banks, instead of a copy of the original court or SACAT order. These orders often contain sensitive personal information about the client, and this certificate will allow the Public Trustee to enter into transactions with a third party without compromising that information.

The bill also contains an amendment to simplify the process of transferring administration. While acting as a financial administrator, the Public Trustee transacts on behalf of the client. Where a service provider is engaged, they are generally contracted with the client through the Public Trustee rather than with the Public Trustee directly.

Should the Public Trustee's administration come to an end, money may still be owed to service providers engaged during that administration. The Public Trustee is not able to settle those debts as they are no longer authorised to act on behalf of the client. This bill will allow the Public Trustee to retain a small amount of client funds to settle these transactions as part of the process of handing over the estate to the new administrator.

The amount of money retained must not exceed the amount prescribed by regulation. The Public Trustee has estimated that a limit of $5,000 would be appropriate. This will be done to simplify the process of transferring administration and save the new administrator the hassle of being approached for payment of debts they were not involved in. The bill requires the new administrator or former client to be informed of any payment being made.

The bill also deals with the matter of litigation guardians. It is common for the Public Trustee and Public Advocate to act as a litigation guardian on behalf of a minor or a person with a mental incapacity. The process to appoint a litigation guardian to a person with a mental incapacity is at the discretion of the court. This bill proposes to legislate consideration that a court must take into account before appointing the Public Trustee or Public Advocate to this role. The proposed factors that must be considered include whether the litigant is already a client of those offices, the nature of the proceedings and whether there is a relative, friend or associate of the litigant willing and able to act as litigation guardian.

The government will not support the amendment filed by the Hon. Michelle Lensink to repeal the part of the bill dealing with litigation guardians. These provisions will not constrain the discretion of the courts. Judicial oversight is important as it involves consideration of the best interests of a vulnerable person. However, while the bill requires the consideration of the listed factors, the weight they are given and the ultimate decision to appoint all remain at the discretion of the court. Maintaining the efficacy of the office of the Public Trustee and the Public Advocate is important. Their work may not be particularly glamorous, but it is essential. I commend the bill to the chamber.

The Hon. R.P. WORTLEY (16:36): I rise briefly to discuss the Statutes Amendment (Public Trustee and Litigation Guardian) Bill 2023. The government introduced the bill to amend the Public Trustee Act 1995, the Guardianship and Administration Act 1995 and to make miscellaneous amendments to enhance the efficiency of the offices of the Public Trustee and Public Advocate.

The proposed changes have all arisen out of suggestions made by the Public Trustee and Public Advocate to the Attorney-General's Department. The bill changes the way the Public Trustee distributes the profits of clients' money invested in common funds. The new method is less complex and will result in faster and more efficient profit distribution to clients.

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 funds are distributed back to the relevant estates. Currently, capital gains and income are distributed by slightly different methods, which necessitate separate calculations and distributions. The bill would apply the same test for distributing both types of profits so that distribution processes can be simplified and estates can be finalised more efficiently.

An independent valuation the Public Trustee obtained showed that clients' financial positions would not be materially disadvantaged. The bill changes the required monthly valuation of common funds from the first to the last business day of the month, to be in line with industry standards. This change arises from difficulties the Public Trustee has encountered when transacting with third parties, for example, requesting information about a customer's financial affairs from a bank.

Based on privacy considerations, the bank may be reluctant to provide the information without proof of the Public Trustee's authority. The Public Trustee could provide a copy of the court or SACAT order; however, this can often contain personal information about the client, so they prefer to have an alternate way to prove authority.

The bill allows the Public Trustee to sign a certificate asserting authority and to provide this instead of a copy of the original order. The certificate will be required to detail the source and the scope of the authority and can be relied upon by third parties for transactional purposes.

When acting as a financial administrator under the Guardianship and Administration Act 1993, the Public Trustee transacts on behalf of the client. If they engage a service provider, such as a storage service, the service provider is generally contracting with the client through the Public Trustee rather than contracting with the Public Trustee directly.

The Public Trustee's administration might be revoked by order of SACAT either because the former client is incapacitated or because a friend or family member wishes to take over. At the time of revocation, money may still be owed to service providers engaged in the Public Trustee's administration; however, the Public Trustee is not able to pay it as it is no longer authorised to transact on behalf of the client.

The bill allows the Public Trustee to retain a small amount of client funds to settle outstanding transactions as part of the process of handing the estate over to the new administrator. They will not be authorised to incur any new debts, only to pay those that were incurred during the administration. This will simplify the process of transferring administration and save the new administrator or former protected person the hassle of being approached for payment of debts that they were not involved in.

The bill requires the new administrator and/or former client to be informed of the payment being made, which will take place as part of the pre-existing practice of providing full financial statements upon revocation of an administration order. The bill provides that the amount of money retained by the Public Trustee must not exceed the amount prescribed by regulation. The Public Trustee has estimated that a prescribed limit of $5,000 would adequately cover most routine situations.

A litigation guardian is a person responsible for directing litigation on behalf of a minor or a person with a mental incapacity. It is common for the Public Trustee and the Public Advocate to act as a litigation guardian. The conduct of proceedings for persons under a legal incapacity, including the process of appointing a litigation guardian, is ultimately at the discretion of the court.

The bill proposes to legislate considerations that a court must take into account before appointing the Public Trustee or Public Advocate as a litigation guardian. The proposed factors that must be taken into account include whether the litigant is already a client of the Public Trustee or the Public Advocate, 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 Hon. Michelle Lensink has filed an amendment to repeal part of the bill that deals with litigation guardians. The bill proposes to legislate considerations that a court must take into account before appointing the Public Trustee or Public Advocate as a litigation guardian for a litigant under a disability. Collectively, the amendments filed would remove these reforms from the bill in their entirety.

The government does not support this amendment. These provisions will not constrain the discretion of the courts. Whilst the listed factors are mandatory to take into account, the weight they are given and the ultimate decision to appoint a litigation guardian all remain for the courts to decide. They are free to appoint the Public Trustee or the Public Advocate as the litigation guardian if it is appropriate in all of the circumstances.

It is the government's position that it is in the best interests of vulnerable persons to have the court convinced of the appropriateness of the appointment. Independent judiciary oversight of this decision is important since it involves consideration of the best interests of a vulnerable person. The bill has been subject to consultation with a wide range of stakeholders representing the legal sector, courts and aged and disabled persons. I commend the bill to the chamber.

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (16:44): I thank all members for their important contributions and look forward to the committee stage of this bill.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. J.M.A. LENSINK: I am not sure if the Attorney was here when I gave my second reading speech, but I just raised concerns from the Law Society about the money that can be set aside by the Public Trustee to settle small routine debts and so forth. I quoted from their letter that, if the amount is only several hundred or a few thousand dollars, the committee considered that would be reasonable, but they have concerns. I am wondering if, firstly, the minister can give an indication of what quantum he would consider reasonable as a maximum and, secondly, how far away the regulations are?

The Hon. K.J. MAHER: I thank the honourable member for her question. As she has indicated, it is a few hundred or maybe up to a few thousand dollars. The amount will be made by regulation, so it would be disallowable by this chamber. The initial indication from the Public Trustee is an amount likely to regulate in the order of about $5,000.

The Hon. J.M.A. LENSINK: I move:

Amendment No 1 [Lensink–1]—

Page 2, lines 4 and 5—Delete 'and Litigation Guardian'

I did speak to the amendment in my second reading speech, but I think it is worth repeating in my non-legally trained language. My understanding is that the process and the factors that the courts go through when determining whether to appoint the Public Trustee is a process that takes place in any case. This new section 54A is going to create more work for the court. It will create more work for the person who is seeking the appointment and these people, we should bear in mind, are vulnerable and if they do have legal representation it is likely to be from the Legal Services Commission or, in the unlikely event, that they can actually afford to have private counsel. We consider that this is going to cause more work and potentially cause some financial hardship for those clients.

The Hon. K.J. MAHER: I thank the honourable member for her contribution; however, it did alarm me slightly. We were talking about the ghost of the Hon. Rob Lucas yesterday when the honourable member got up and prefaced her contribution by saying that she was not legally trained. I think almost every day when Rob Lucas was passing legislation he would say, 'I am not a lawyer.' It is eerie that we had the ghost of Rob Lucas back again in a very small way.

In relation to the honourable member's amendments, the government will not be supporting them. In our view, the bill proposes to legislate the considerations that a court must take into account before appointing the Public Trustee or the Public Advocate as a litigation guardian for a litigant under a disability. Collectively, the amendments filed would remove these reforms in their entirety. These provisions that are being proposed will not constrain the discretion of the court. Whilst the listed factors are mandatory to take into account, the weight they are given and the ultimate decision to appoint a litigation guardian all remain for the court to decide. They are free to appoint the Public Trustee or the Public Advocate as a litigation guardian if it is appropriate in all the circumstances.

I can inform the chamber that the courts did not express any concerns with the consideration. We do not have anything to suggest that it would increase the workload of the court. The Chief Justice's submission confirmed that the amendments largely reflect the existing practices of the court. I am informed that the judge of the Youth Court thought that the provisions could provide a useful source of guidance for the court when appointing a litigation guardian. So we will not be supporting the amendment.

The committee divided on the amendment:

Ayes 7

Noes 10

Majority 3

AYES

NOES

PAIRS

Amendment thus negatived; clause passed.

Remaining clauses (2 to 10) and title passed.

Bill reported without amendment.

Third Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (16:55): I move:

That this bill be now read a third time.

Bill read a third time and passed.