In the Estate of HIEN NGOC TRUNG LE (DECEASED) - [2017] SASC 124

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction)
In the Estate of HIEN NGOC TRUNG LE (DECEASED)
[2017] SASC 124
Judgment of The Honourable Justice Stanley
29 August 2017
SUCCESSION - ADMINISTRATION OF ESTATE - OTHER MATTERS
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - PARTICULAR CLASSES OF ACT - REMEDIAL OR BENEFICIAL ACTS OR PROVISIONS
This is an application under section 67 of the Administration and Probate Act 1919 (SA) (the Act) seeking an order of the Court dispensing with the requirement under section 65 of the Act that an administrator must deliver up property to the Public Trustee when a person entitled to said property is not sui juris.
Held, per Stanley J:
1. It is settled that beneficial and remedial legislation is to be interpreted as widely as its terms permit (at [13]).
2. The key consideration in the determination of an application pursuant to s 67 is whether a beneficiary who is not sui juris is properly protected (at [14]).
3. In these circumstances it is beneficial and expedient to make an order pursuant to s 67 dispensing with compliance with s 65 (at [17]).
Administration and Probate Act 1919 (SA) s 65, s 67, referred to.
In the Estate of Richter (Deceased) [2011] SASC 124, discussed.
IW v The City of Perth & Ors (1997) 191 CLR 1, considered.

In the Estate of HIEN NGOC TRUNG LE (DECEASED)
[2017] SASC 124
Testamentary Causes Division
STANLEY J:
Introduction

This is an application pursuant to s 67 of the Administration and Probate Act 1919 (SA) (the Act) by the administrator of a deceased estate for an order dispensing with the requirement to pay over money to the Public Trustee in accordance with s 65 of the Act.
I have received affidavits of the plaintiff, Lamthi Phuong Phan, of her sister, Thu Anh Thi Trotter, and of an employee of ANZ Bank, Linda Jane Panaszek. I am satisfied it is appropriate to proceed on the basis of the evidence set out therein.
Hien Ngoc Trung Le died intestate on 21 October 2015. He is survived by his widow the plaintiff, who is also the administrator of the estate, and two infant children, Evelyn aged six and Amelia aged three.
The persons entitled to share in the estate of the deceased are the plaintiff and her two children. Each of the children is entitled to the sum of $137,573 from the estate. However, the principal asset of the estate is a half-interest in real estate at Virginia from which the deceased and the plaintiff conducted a business. The deceased’s brother and sister-in-law are the other registered proprietors of the land from which they also conduct a separate business. The property is encumbered by a complex co-lateralised loan structure with the ANZ Bank.
The case is unusual in that the plaintiff proposes to establish two trusts in favour of each of her children and to settle upon them the sum of $1,500,000. It is proposed that the trustees of the trusts will be the plaintiff and her sister Thu Anh Thi Trotter. The trust funds will be derived from the proceeds of a life insurance policy of which the plaintiff was the sole nominated beneficiary.
Both the plaintiff and her sister have considerable business experience. They both are prepared to act as trustees on a gratuitous basis. The plaintiff undertakes not to seek to recover the funds that she proposes to settle on the trusts for each of Evelyn and Amelia either from the estate or from the beneficiaries of the trusts. In deciding to settle these funds on the trusts the plaintiff has taken advice from ANZ Wealth Legal Services which is an incorporated legal practice and a separate legal entity from the ANZ Bank.
It is proposed that the trust monies will be held on trust until the termination date which will be the earlier of: the child attaining the age of 30 years; or after the child attains the age of 18 years at such other date as nominated by the child with the consent of the trustee and appointor; or the date of the child’s death.
Section 65 of the Act requires the administrator to deliver property held on behalf of a beneficiary who is not sui juris to the Public Trustee. Accordingly, the plaintiff is required to transfer Evelyn and Amelia’s shares in the estate to the Public Trustee because they are not sui juris.
The plaintiff seeks orders pursuant to s 67 of the Act. The order sought pursuant to s 67 is that she not be bound by s 65 of the Act which relates to the duty of an administrator of an estate to pay money and deliver property belonging to a person who is not sui juris to the Public Trustee after a certain period of time.
The Statutory Scheme
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 or expedient so to do” order that an administrator not be bound by s 65. The plaintiff contends that an order should be made that she 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. The application is not opposed by the Public Trustee. Before addressing the merits of the application it is appropriate to note some important features of the legislative scheme concerning the relevant provisions of the Act.
Section 65 seeks to protect the 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, Parliament conferred on the court the power to relieve the administrator from the obligation under s 65 when it is “beneficial or expedient so to do”. It is clear that s 65 and s 67 have, at least in part, beneficial and remedial purposes. It is settled that beneficial and remedial legislation is to be interpreted as widely as its terms permit.[1]
[1] IW v The City of Perth & Ors [1997] HCA 30, (1997) 191 CLR 1 at 12.
In In the Estate of Richter (Deceased)[2] Gray J concluded that the key consideration in the determination of an application pursuant to s 67 is whether a beneficiary who is not sui juris is properly protected.
[2] [2011] SASC 124.
Consideration
This is an unusual case. The plaintiff comes to the Court seeking an order pursuant to s 67 in circumstances where she proposes to settle upon the infant beneficiaries trust funds of much greater value than the property that would be required to be conveyed to the Public Trustee if the dispensation for which s 67 provides is not made.
In determining whether Evelyn and Amelia will be properly protected by making an order pursuant to s 67(1) dispensing with the requirement to transfer to the Public Trustee their interests in the property of the estate being administered, I consider the following factors are relevant:
1.Conveyance of the children’s respective interests in the property of the estate potentially cannot be effected without the sale or further encumbering of the Virginia property, which is the principal asset of the estate. That risks damage being done to the family business conducted from the Virginia property. That would be contrary to the interests of the children.
2.The period during which part of the deceased’s estate would need to be administered before the children attain their majority is considerable, being some 12 years in the case of Evelyn and some 15 years in the case of Amelia. While a lengthy period of administration is sometimes a factor that weighs against making an order pursuant to s 67, in this case I am satisfied that it is a factor in favour of making the order given that if an order is not made, the funds will be transferred to the Public Trustee for future management and administration and be subject to the commission charged by the Public Trustee for the performance of that function over a period of many years which would be a significant drain on the funds.
3.The proposal by the plaintiff to settle the trusts for the benefit of the children evidences the plaintiff’s intentions to safeguard and advance their financial interests. Her use of her own funds to settle trust funds on the children far in excess of their entitlements under the estate evidences the plaintiff’s genuine intentions to protect and advance the interests of her children. Holding assets on trust will adequately protect Evelyn and Amelia’s interests.
4.I am satisfied that the plaintiff and her sister Thu Anh Thi Trotter will manage the trust estates competently and gratuitously.
5.The Public Trustee does not oppose the orders sought by the plaintiff on terms reflected in the orders I propose to make.
Conclusion
In these circumstances I am satisfied it is both beneficial and expedient to dispense with compliance with s 65. For these reasons I make an order dispensing with the obligation on the part of the plaintiff to comply with the requirements of s 65 of the Act. Further I make the orders sought by the plaintiff, which are not opposed by the Public Trustee, as follows:
1.The plaintiff not be bound by s 65 of the Administration and Probate Act 1919 (SA).
2.Trusts for each of Evelyn Ngoc Tram Le (Evelyn) and Amelia Ngoc Trang Le (Amelia) having been established on 8 August 2017, and the plaintiff having settled the sum of $500,000 on each trust prior to 23 August 2017,[3] the plaintiff is to settle a further $1,000,000 on each trust by close of business on 28 February 2019. The plaintiff may do so incrementally over the 18-month period.
[3] Affidavit of Linda Jane Panaszek sworn 24 August 2017.
3.The trustees of the trusts for each of Evelyn and Amelia are to be Lamthi Phuong Phan and Thu Anh Thi Trotter.