Guardianship and Administration

What is a guardian and administrator?

A guardian/administrator is a role appointed to a person by the Victorian Civil and Administrative Tribunal (VCAT), so that they may make decisions on behalf of another person with a disability who is unable or has a limited ability to make decisions on their own (Vulnerable Person).

The appointment of a guardian/administrator is governed by the Guardianship and Administration Act 2019 (Vic) (GAA) and the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act).

A guardian and an administrator have separate and distinct decisions they can make on behalf of a Vulnerable Person. Sometimes a person can be appointed as both a guardian and an administrator. In certain circumstances, it is possible to have joint guardians and joint administrators.

What is a disability?

Disabilities that impact upon the decision-making capacity of a Vulnerable Person include:

  1. neurological impairment;
  2. intellectual impairment;
  3. mental disorder;
  4. brain injury;
  5. physical disability; or
  6. dementia.

What decisions can a guardian and an administrator make?

A guardian has the power to make personal and lifestyle decisions that affect the Vulnerable Person. For instance, a guardian may make decisions regarding:

  1. accommodation, including where and with whom the Vulnerable Person lives;
  2. healthcare and medical treatment;
  3. work arrangements;
  4. access to people and services;
  5. whether the Vulnerable Person will go on holidays and where.

An administrator has the power to make financial decisions on behalf of the Vulnerable Person. Some examples of the decision-making powers of an administrator include:

  1. purchasing items and paying for expenses of the Vulnerable Person;
  2. investing money;
  3. purchasing/selling property;
  4. managing their business.

Who can be appointed as a guardian or administrator?

The following people can be appointed as a guardian:

  1. a friend, relative or family member of the Vulnerable Person;
  2. if there is no one suitable, the Public Advocate may be appointed by VCAT.

The following people can be appointed as an administrator:

  1. a friend, relative or family member of the Vulnerable Person;
  2. a solicitor/lawyer;
  3. an accountant;
  4. if there is no one suitable, State Trustees or a private trustee company may be appointed.

Please note: if a solicitor or accountant is appointed as an administrator, it is likely they will require payment for their services when acting in their capacity as administrator.

What are the duties of a guardian and administrator?

When making decisions on behalf of a Vulnerable Person, a guardian or administrator must give paramount consideration to the will or the preferences of the Vulnerable Person. This means that the administrator must ascertain what is important to the Vulnerable Person and be guided by these preferences when making decisions, as far as practicable.

If an administrator or guardian is unable to ascertain the Vulnerable Person’s wishes, then so far as is practicable, the guardian or administrator must make decisions based on what they believe the Vulnerable Person’s preferences are likely to be. This also includes a requirement to consult with the Vulnerable Person’s relatives, friends and carers.

If an administrator or guardian cannot ascertain the Vulnerable Person’s wishes, then they are obliged to act in a manner that promotes their personal and social welfare.

A Vulnerable Peron’s wishes can only be overridden in limited circumstances where it is necessary to prevent them from suffering serious harm.

In addition to the decision-making principles outlined above, an administrator or guardian must:

  1. act honestly and diligently in the best interests of the Vulnerable Person;
  2. use reasonable care and skill when making decisions;
  3. not use their position to profit from the Vulnerable Person;
  4. avoid scenarios where their own interests conflict with the interests of the Vulnerable Person;
  5. not disclose confidential information regarding the Vulnerable Person, except as required by the law.

How is a guardian or administrator appointed?

A guardian or administrator can only be appointed through VCAT.

VCAT will also only consider an application to appoint a guardian or administrator if the Vulnerable Person is at least 18 years of age, or likely to be 18 years of age once the VCAT order takes effect.

The content of an application to VCAT must include:

  1. the Vulnerable Person’s name;
  1. the type of order sought; ie, does the order relate to personal / lifestyle decisions (guardian) or does it relate to financial matters (administrator);
  1. the name and contact details of:
    1. (a) the proposed guardian/administrator;
      (b) the applicant (ie the person making the application);
      (c) any person with an interest in the application (eg close friends, family members, carers, attorney under an enduring power of attorney, supportive attorney);
  1. details of the support and needs of the Vulnerable Person, which includes support provided by any companion animal.

The parties to an application in VCAT will be the applicant, the Vulnerable Person, the proposed guardian/administrator and any current decision-makers of the Vulnerable Person.

If an application to VCAT is made, then the following people must be notified of the application, the hearing of the application and any orders made:

  1. any party to the application;
  2. the spouse or domestic partner of the Vulnerable Person;
  3. any person with a direct interest in the application;
  4. the Public Advocate / State Trustees where there is no proposed guardian/administrator.

Generally, VCAT must start to hear an application to appoint a guardian or administrator within 30 days of receiving the application. In certain circumstances, VCAT may refer the application to a compulsory conference or mediation.

What do I do if I receive notice of a VCAT application?

If you have received notice of a VCAT application in respect of a family member or loved one, then you have the right to request information regarding the application from the parties to the proceeding.

You can also seek to be added to the proceeding as a party so that you will have a say in the outcome of the application.

What does VCAT consider in an application to appoint a guardian/administrator?

When considering whether to appoint a guardian/administrator, VCAT will apply the following test:

  1. Does the Vulnerable Person have a disability as defined by the Act?
  2. Does the application relate to personal or financial matters?
  3. Is the order necessary; ie, is there a need for the order?

After considering the test outlined above, VCAT may make the following orders:

  1. an order appointing a guardian or administrator;
  2. an order for a supportive guardianship or administrative order;
  3. an order declining to appoint a guardian or administrator.

A supportive guardianship or administrative order is a limited type of order that grants a person information powers (ie the power to collect, access and provide information) and communication powers (ie the power to communicate information for and on behalf of the Vulnerable Person). However, a supportive guardian or administrator cannot make significant financial transactions or personal decisions on behalf of a Vulnerable Person.

Can a Vulnerable Person commence/defend legal proceedings?

If a Vulnerable Person is involved in legal proceedings, then an administrator can be appointed and has the power to bring and defend a legal proceeding in the name of the Vulnerable Person.

As an example, if a Vulnerable Person has been excluded from a will of their parent, an administrator can be appointed by VCAT to commence a family provision claim against the estate on behalf of the Vulnerable Person.

If an administrator is appointed to commence or defend legal proceedings, then the legal costs are generally paid from the Vulnerable Person’s estate, subject to any other costs orders being made in the proceedings.

However, if an administrator or guardian has behaved unreasonably or negligently, then they may be personally responsible to pay for the costs of the proceedings.

What can I do if I am unsure about making a financial decision as an administrator?

An administrator or guardian can apply to VCAT for advice regarding the scope of their administration order or the exercise of any powers as administrator.

For example, an administrator can apply to VCAT for advice as to whether:

  1. they can sell the Vulnerable Person’s property / purchase a new one;
  1. they can take certain steps to address the Vulnerable Person’s needs;
  1. existing financial arrangements with family members should continue/cease.

Before obtaining advice from VCAT, it may be prudent for an administrator to obtain professional advice from a financial adviser. The costs to obtain such advice can be paid from the Vulnerable Person’s assets.

What are some common mistakes made by administrators?

Being appointed as an administrator is an incredibly important role and imparts very strict obligations on the decision-maker to act in the best interests of the Vulnerable Person.

Examples of serious mistakes commonly made by administrators include:

  1. entering into conflict transactions – eg using the Vulnerable Person’s funds to purchase a car in the administrator’s name, the car being used to transport the Vulnerable Person. This example is a conflict transaction because the administrator has used the Vulnerable Person’s money to purchase an asset that is ultimately for their own benefit.
  1. failing to keep accurate records – eg purchasing groceries for the Vulnerable Person using their funds, but failing to keep a receipt of the items purchased. If an administrator is purchasing items for a Vulnerable Person, they must always keep records of the funds expended.
  1. failing to keep property separate – eg combining your own personal funds with funds of the Vulnerable Person. It is important to keep the property belonging to a Vulnerable Person separate to ensure that their funds are being used for their sole benefit.

What can I do if a guardian/administrator has caused loss to a Vulnerable Person?

If a Vulnerable Person has suffered a loss as a result of a guardian or administrator’s conduct, then it is possible to apply to VCAT or the Supreme Court of Victoria for compensation.

As an example, if an administrator has misappropriated funds from a Vulnerable Person’s bank account and used the funds for their own benefit, then it is possible to file a claim for compensation.

A claim for compensation can be made by the following people:

  1. the Vulnerable Person;
  2. the personal representative of a Vulnerable Person’s estate;
  3. the nearest relative of the Vulnerable Person;
  4. any other person determined by the Supreme Court or VCAT as having a special interest in the affairs of the Vulnerable Person.

If you need to consider the appointment of a guardian or administrator on behalf of a loved one or have concerns about the conduct of a guardian or administrator, then you should contact our Wills & Estates team to discuss how we can help.