In the Estate of JOHN DAVI (DECEASED) - [2011] SASC 95

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction)
In the Estate of JOHN DAVI (DECEASED)
[2011] SASC 95
Reasons for Decision of The Honourable Justice Gray
15 June 2011
SUCCESSION - EXECUTORS AND ADMINISTRATORS - PROCEEDINGS BY EXECUTORS OR ADMINISTRATORS
INTERPRETATION - GENERAL RULES OF CONSTRUCTION OF INSTRUMENTS - OTHER MATTERS
Application for an order under section 63 of the Administration and Probate Act 1919 (SA) to sell the real property from the deceased's estate - where the real property was left to the deceased's two sons as to 47.5 per cent each and to the deceased's infant grandson as to five per cent, as tenants in common - whether the sale of the real property was "for the benefit of the infant" as required by section 63.
Held: application granted - sale of the deceased's real property is for the benefit of the infant.
Administration and Probate Act 1919 (SA) s 63; Administration and Probate Act 1891 (SA) s 80; Trustee Act 1958 (Vic) s 55; Trustee Act 1953 (Vic) s 55; Law of Property Act 1936 (SA) s 70; Conveyancing and Law of Property Act 1884 (Tas) s 54; Infants’ Property Act 1830 (Imp) (WA) s 32; Trustee Act 1925 (UK) s 53; Infants’ Custody and Settlements Act 1899 (NSW) s 16; Public Trustee Act 1930 (Tas) s 35, referred to.
In the Estate of Marden [2008] SASC 312; State of New South Wales v Amery (2006) 230 CLR 174; IW v The City of Perth (1997) 191 CLR 1; Re White [1959] VR 661, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"for the benefit of the infant", "benefit"

In the Estate of JOHN DAVI (DECEASED)
[2011] SASC 95
Testamentary Causes Jurisdiction
GRAY J:
Introduction

This is an application for an order under section 63 of the Administration and Probate Act 1919 (SA) to sell the real property from the estate of the deceased, for the benefit of C, his infant grandson.
On 15 February 2011, I made the orders authorising the sale of the real property. These are my reasons for making those orders.
Background
The deceased died on 21 April 2009. Probate was granted on 13 October 2009 to the deceased’s two sons, his only children, and the executors and trustees appointed in his will.
The deceased, in his will, left his real property situated at Kensington Park in the State of South Australia. This property, on which there is a house, was left to each son as to 47.5 per cent, and to C as to 5 per cent, as tenants in common. The deceased left his residuary estate to his two sons and C in the same proportions.
The assets of the deceased were the Kensington Park property which was valued by the Valuer-General at $670,000.00;[1] car, household and personal effects, which were estimated by the executors to be worth $13,800.00; and, cash assets in the sum of approximately $55,000.00. The only liability disclosed was $11,424.40 for funeral expenses.
[1] Two other valuations valued the Kensington Park property at and in excess of $800,000.00.
C is an infant who was born on 11 June 2008. Since August 2009, he has lived with his father, one of the executors, in the deceased’s Kensington Park property.
The two sons of the deceased decided that they both wanted to convert their interests in the Kensington Park property into cash by selling the property on the open market as they were unable to agree on a proposal for one son to buy the Kensington Park property from the deceased’s estate.
Clause 8.1 of the deceased’s will contains a power for the trustees to sell the Kensington Park property. However, the executors have, out of caution, made an application by summons seeking an order pursuant to section 63 of the Administration and Probate Act to sell the property. On 25 November 2010, the Registrar of Probates, pursuant to Rule 77 of the Probate Rules 2004 (SA), referred the summons to me for consideration.
C’s litigation guardian does not object to an order being made pursuant to section 63 of the Administration and Probate Act. Nonetheless, I must be satisfied that it is appropriate for such an order to be made.
Legal Principles
Division 3 of Part 3 of the Administration and Probate Act contains various general provisions relating to the administration of estates. Section 63 falls within that Division and it relevantly provides:[2]
The Court may, on the application of any executor, administrator, or trustee in whom any real or personal property, whether specifically devised or bequeathed or not, belonging to any infant is vested, or on the like application of the guardian of the estate or the next friend of any infant beneficially entitled to any real or personal property, whether specifically devised, or bequeathed or not, order that such property, or any part thereof, be sold in any case in which the Court considers it for the benefit of the infant that such sale should be effected.
[2] Administration and Probate Act 1919 (SA), section 63.
This provision is substantially the same, save for one minor amendment, as the provision in the Administration and Probate Act when it was first enacted in 1919. Section 63 has a progenitor in section 80 of the Administration and Probate Act 1891 (SA), which was in substantially similar terms. Despite their existence for over a century, the terms of section 63 and its progenitor do not appear to have been considered by this Court.
It is evident from the terms of section 63 that I must be satisfied that the sale of the Kensington Park property is “for the benefit of the infant”; that is, for C’s benefit. A number of provisions exist in other jurisdictions that allow a particular order, but not necessarily an order for the sale of property, to be made having regard to the benefit for an infant, minor or child.[3] For example, section 55 of the Trustee Act 1958 (Vic) relevantly provides:
Where a minor is beneficially entitled to any property the Court may, with a view to the application of the capital or income thereof for the maintenance, education, advancement or benefit of the minor, make an order—
(a)     appointing a person to convey such property; or
(b)     in the case of stock, or a thing in action, vesting in any person the right to transfer or call for a transfer of such stock, or to receive the dividends or income thereof, or to sue for and recover such thing in action, upon such terms as the Court thinks fit.
[Emphasis added.]
Its progenitor, which was in almost identical terms, was considered by Smith J in Re White,[4] where it was observed that the term “benefit” is to be “construed very widely”.[5] However, it is to be noted that the section considered by Smith J is in different terms to section 63 of the Administration and Probate Act in important respects. In particular, in considering whether to make an order under the Victorian Act, Smith J was concerned with whether the “application of the capital or income”[6] derived from the sale of the property was for the benefit of the infants; separate from a consideration of any benefit arising from the sale itself.[7]
[3]    See for example, Conveyancing and Law of Property Act 1884 (Tas), section 54; Infants’ Property Act 1830 (Imp) (WA), section 32; Trustee Act 1958 (Vic), section 55; Trustee Act 1925 (UK), section 53; see also in another context section 16 of the Infants’ Custody and Settlements Act 1899 (NSW); in recognition of the Court’s general jurisdiction, see section 35 of the Public Trustee Act 1930 (Tas).
[4]    Re White [1959] VR 661.
[5]    Re White [1959] VR 661, 665 citing Re Heyworth’s Interest [1956] 2 All ER 21; Re Halsted’s Will Trusts [1937] 2 All ER 570; Re Ropner’s Settlement [1956] 3 All ER 332; Re Newton (1936) 53 WN (NSW) 117.
[6]    Trustee Act 1953 (Vic), section 55 as cited in Re White [1959] VR 661, 664 [Emphasis added.].
[7]    Re White [1959] VR 661, 665-667.
One thing, however, is clear. By requiring the order to be “for the benefit of the infant”, section 63 has a beneficial and remedial purpose.[8] It is settled that beneficial and remedial legislation is to be interpreted as widely as its terms permit.[9] The following remarks of Brennan CJ and McHugh J in IW v City of Perth are pertinent:[10]
… [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.]
[8] In In the Estate of Marden [2008] SASC 312 at [14] with respect to this type of statutory provision, I observed: “A beneficial or remedial statutory provision is one that gives some benefit to a person and thereby remedies some injustice [Re McComb [1999] 3 VR 485, [22]].”
[9] State of New South Wales v Amery (2006) 230 CLR 174, [138] (Kirby J) citing Bridge Shipping Pty Ltd v Grant Shipping SA (1991) 173 CLR 231, 260-261 and Qantas Airways Ltd v Christie (1998) 193 CLR 280, [152].
[10] IW v The City of Perth (1997) 191 CLR 1, 12.
The Merits
Applying the above principles, I now turn to the merits of the within proceeding.
The executors contended that the sale of the Kensington Park property would benefit C. The executors both deposed that if C were to continue residing at the property, he would not have sufficient funds to pay his share of the outgoings of the property or to pay rent. They further deposed that letting the Kensington Park property to a third party until C attains 18 years of age would not be appropriate, practical or in C’s interests for the following reasons:
·The two sons of the deceased do not want to defer realisation of their interest in the Kensington Park property. It was proposed by one of the sons that if an order were not made pursuant to section 63 of the Administration and Probate Act, he would bring an application pursuant to section 70 of the Law of Property Act 1936 (SA) seeking an order for the sale of the Kensington Park property. The cost of that application would reduce the size of the deceased’s estate, reducing the funds that C would receive from the estate.
·Capital Gains Tax would become payable in relation to any appreciation in the value of the Kensington Park property since the deceased’s death if that property was not sold by 21 April 2011. This would also reduce the size of the deceased’s estate.
·Unlike an investment with the Public Trustee,[11] the Kensington Park property is a non-liquid asset which would provide a low level of income and is not capable of generating significant amounts of cash to be used by or on behalf of C for medical, educational or other expenses before he attains 18 years of age.
[11] It is to be noted that the two sons of the deceased deposed to an intention to retire as trustees of C’s interest under the will and to appoint the Public Trustee in their place.
I am satisfied that the sale of the Kensington Park property is for C’s benefit. Further, the view of C’s litigation guardian that the order sought should be made is persuasive. In my view, it is appropriate for me to exercise my discretion under section 63 of the Administration and Probate Act to order the sale of the Kensington Park property.
Conclusion
For the above reasons, I granted the application.