In the Estate of DESMOND GRAHAM RAKE (DECEASED) - [2012] SASC 87

Supreme Court of South Australia
(Testamentary Causes Jurisdiction: Application)
In the Estate of DESMOND GRAHAM RAKE (DECEASED)
[2012] SASC 87
Judgment of The Honourable Justice Stanley (ex tempore)
31 May 2012
SUCCESSION - EXECUTORS AND ADMINISTRATORS - OTHER MATTERS
Application pursuant to section 67 of the Administration and Probate Act 1919 (SA) by the administrators of a deceased’s estate for an order dispensing with the requirement to pay over money to the Public Trustee in accordance with section 65 of the Act – applicants obtained grant of letters of administration of the estate of the deceased, their father, with the will annexed for the use and benefit of the universal devisee and legatee under the will, their mother.
Held: Application granted. Beneficiary of the estate is properly protected – beneficial or expedient to make order dispensing with obligation on part of applicants to comply with requirements of section 65.
Administration and Probate Act 1919 (SA) s 31, s 56, s 65, s 67; Guardianship and Administration Act 1993 (SA) s 25, referred to.
IW v City of Perth (1997) 191 CLR 1; In the Estate of Freebairn (2005) 93 SASR 415; In the Estate of Richter (Deceased) [2011] SASC 124, discussed.
In the Estate of Raymond Charles Estall (Deceased) [2011] SASC 188, considered.

In the Estate of DESMOND GRAHAM RAKE (DECEASED)
[2012] SASC 87
Testamentary Causes Jurisdiction
STANLEY J:
Introduction

This is an application pursuant to s 67 of the Administration and Probate Act 1919 (SA) (“the Act”) by the administrators of a deceased’s estate for an order dispensing with the requirement to pay over money to the Public Trustee in accordance with s 65 of the Act. Section 65 requires an administrator to deliver property held on behalf of a beneficiary who is not sui juris to the Public Trustee. Desmond Graham Rake, the deceased, died on 11 January 2009. He was survived by his wife, Christine Mary Rake (“Christine”), and two children: the applicants Ronald Desmond Rake (“Ronald”) and Cindy Marie Rake (“Cindy”). The will of the deceased appointed Christine as the sole executor and also made her the universal devisee and legatee.
Christine suffers from dementia (Alzheimer’s type) and chronic schizophrenia. She is unable to administer the estate. Accordingly, she was unable to take the grant of probate. Her children applied for and received in her favour an order for letters of administration of the estate of the deceased with the will annexed for the use and benefit of Christine during her incapacity. By affidavit sworn by Ronald on 27 March 2012 and by Cindy on 29 March 2012 each deposed to the facts giving rise to the within application.
By a grant dated 5 December 2008, Ronald was appointed Christine’s attorney pursuant to an enduring power of attorney. That grant has not been revoked subsequently. Ronald has also been appointed as sole guardian to Christine pursuant to s 25 of the Guardianship and Administration Act 1993 (SA). Ronald has tended to the day-to-day administration of his mother’s financial affairs since 2010 due to her incapacity.
The assets of Christine consist of real estate at Murray Bridge valued by the Valuer-General at $165,000, a residential security bond with the Resthaven aged care facility valued at $165,500, bank savings of nearly $31,000, a term deposit of approximately $6,500 and a balance of approximately $4,500 in a superannuation fund.
The grant of letters of administration of the estate of the deceased was made on 27 January 2012. The net estate of the deceased disclosed in the statement of assets and liabilities records a value of $88,124.91. Of the assets of the estate so disclosed, three bank accounts have been closed and the proceeds are held in the trust account of the solicitors acting for the applicants. There are shares still to be sold.
The legislative scheme
The applicants seek an order under s 67 of the Act that they not be bound by s 65 of the Act, which section relates to the duty of the administrator of the estate to pay over money and deliver property belonging to a person who is not sui juris to the Public Trustee after a certain period of time. Section 65 provides:
65—Administrator to pay over money and deliver property to Public Trustee
(1)Every administrator who is possessed of or entitled to any property within this State, whether personal or real, belonging to any person who—
(a) is not sui juris, or
(b) is not resident in this State, and has no duly authorised agent or attorney therein:
shall deliver, convey, or transfer such property to the Public Trustee immediately after the expiration of one year from the date of the death of the intestate or testator, or within six months after such sooner time as the same or such portion thereof as is available for that purpose, has been sold, realised, collected, or got in.
(2)The Public Trustee shall then administer such property according to law, and in accordance with any will affecting such property.
(2a)The Public Trustee may, in his discretion, (but subject to the provisions of any will or instrument of trust) realise, or postpone the realisation of, any real or personal property delivered, conveyed or transferred to him under subsection (1) of this section.
(3)This section shall not apply in any case where the administrator is a limited company incorporated or taken to be incorporated under the Corporations Act 2001 of the Commonwealth, and is acting as administrator in pursuance of any powers granted to it by any Act.
(4)This section shall not apply to an administrator acting under any probate or administration not granted by the Supreme Court but sealed with the seal of the Supreme Court in pursuance of the provisions of section 17 of this Act.
(5)Subject to the provisions of any will or instrument of trust, the Public Trustee may, if he is satisfied that it will be advantageous to the beneficiaries, authorise the sale of any trust property, not exceeding four thousand dollars in value, to the administrator, or to the administrator conjointly with any other person, notwithstanding that the property has not been offered for sale by public auction or otherwise.
Section 67(1) provides a dispensing power and is relevantly in the following terms:
67—Judge may dispense wholly or partially with compliance with section 65
(1)A Judge may, on being satisfied by affidavit that it is beneficial or expedient so to do, order—
(a) that any administrator, or proposed administrator, shall not be bound by section 65; or
(b) that any administrator, or proposed administrator, shall not be bound by the said section 65 until after a certain time to be mentioned in the order.
As is apparent, s 67 provides that a judge may, being satisfied that it is “beneficial and expedient so to do”, order that an administrator not be bound by s 65. The applicants contend that an order should be made that they not be bound by s 65 of the Act, as the protection afforded by s 65 to a beneficiary who is not sui juris requiring an administrator to pay the funds to the Public Trustee, is not required in the circumstances of this matter. That application is not opposed by the Public Trustee. Before returning to address this contention and the merits of the application, it is appropriate to say something about the legislative scheme concerning the relevant provisions of the Act.
Section 65 seeks to protect a person where an administrator, not an executor, has been appointed by the Court to administer an estate where a beneficiary is not sui juris. The protection is effected by obligating the administrator to convey the property due to such a beneficiary to the Public Trustee. In enacting s 67 of the Act, Parliament conferred on the Court the power to relieve the administrator from the obligation under s 65 when it is “beneficial and expedient so to do”.
It is clear that s 65 has, at least in part, a beneficial and remedial purpose. It is settled that beneficial and remedial legislation is to be interpreted as widely as its terms permit.
In IW v City of Perth,[1] Brennan CJ and McHugh J said in a joint judgment:[2]
[It is a] rule of construction that beneficial and remedial legislation … is to be given a liberal construction. It is to be given “a fair, large and liberal” interpretation rather than one which is “literal or technical”. Nevertheless, the task remains one of statutory construction. Although a provision of the Act must be given a liberal and beneficial construction, a court or tribunal is not at liberty to give it a construction that is unreasonable or unnatural.
(Footnotes omitted)
[1] (1997) 191 CLR 1.
[2] (1997) 191 CLR 1 at 12.
Section 65 has been considered in two decisions of this Court in In the Estate of Freebairn[3] and In the Estate of Richter (Deceased).[4]
[3] (2005) 93 SASR 415.
[4] [2011] SASC 124.
In Freebairn[5] and in Richter,[6] the Court considered the meaning of the phrase “beneficial or expedient”.
[5] (2005) 93 SASR 415.
[6] [2011] SASC 124.
In Freebairn, Besanko J concluded that the expression required a careful consideration of the facts of the particular case. The important consideration is the due and proper administration of the estate. That was in the context of an application pursuant to s 31(10) of the Act for an order dispensing with the requirement that an administrator provide a surety in accordance with the obligation under s 31(1) of the Act.
In Richter, Gray J, after analysing Freebairn, concluded that there are important differences between the use of the expression as it appears in different places in the Act. Accordingly, s 65 permitted the court to contemplate considerations other than the due administration of the estate. His Honour concluded that on an application pursuant to s 65 the key consideration is whether a beneficiary who is not sui juris is properly protected. This Court has subsequently followed the same approach in In the Estate of Raymond Charles Estall (Deceased).[7]
[7] [2011] SASC 188.
Consideration
Ronald Rake is a real estate agent. He has been managing Christine’s financial and medical affairs since 2010. He has arranged for all medical assessments of Christine’s mental health; overseen her admission to Woodleigh House, which is within the Modbury Hospital, for further mental health assessments, diagnosis and management; overseen her relocation to the Resthaven aged care facility at Murray Bridge; catered for her day-to-day medical and general needs and undertaken other significant health related decisions on her behalf. In addition, he has applied the proceeds of the deceased’s superannuation fund to secure Christine’s place at Resthaven; rented out the former residential property of Christine and the deceased at Murray Bridge to provide her with further income; attended to necessary renovations to that property; paid household accounts which had been unpaid by reason of Christine’s mental incapacity and overseen and managed the payment of her regular expenses. All of this work has been performed without fee.
I am satisfied that if an order is made as sought by the applicants Christine’s affairs will continue to be managed by them, in particular by Ronald, in a competent manner without additional cost to Christine.
On the other hand, if an order is not made and the property of the estate currently under administration is transferred to the Public Trustee for future management and administration, it will be subject to commission charged by the Public Trustee for the performance of this function together with a commission taken by the Public Trustee on the income received from the investment of funds comprising the estate.
The applicants indicate that they understand that, if an order is made as sought, they would be obliged to lodge an administration account with the Public Trustee pursuant to s 56 of the Act. I am satisfied that they will do so.
In all these circumstances, I am satisfied that by making the orders sought, Christine, as the beneficiary of the deceased’s estate, will be properly protected. It would be beneficial to the interests of Christine and expedient that the funds due to Christine be joined with the funds of the protected estate administered by Ronald pursuant to his appointment as Christine’s attorney and as sole guardian pursuant to s 25 of the Guardianship and Administration Act 1993 (SA).
Conclusion
Accordingly, I make an order dispensing with the obligation on the part of the applicants to comply with the requirements of s 65 of the Act. And I make an order in particular terms of the minutes or order handed up and initialled and dated by me.