In the Estate of KARL ALOIS RICHTER (DECEASED) - [2011] SASC 124

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction: Application)
In the Estate of KARL ALOIS RICHTER (DECEASED)
[2011] SASC 124
Reasons for Decision of The Honourable Justice Gray
11 August 2011
SUCCESSION - EXECUTORS AND ADMINISTRATORS - OTHER MATTERS
Application pursuant to section 67 of the Administration and Probate Act 1919 (SA) by the administrator 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 - where applicant obtained grant of letters of administration of the estate of the deceased (her father) with the will annexed, for the use and benefit of the universal devisee and legatee under the will (her mother), who was incapacitated due to dementia and was not competent to perform the role of executor - where applicant also the full administrator of her mother's estate.
Consideration of the meaning of "beneficial and expedient so to do".
Held: Application granted - the beneficiary of the estate is appropriately protected - applicant capable of managing the funds due to her mother - beneficial to the interests of the beneficiary of the estate and expedient that dispensation order be made.
Administration and Probate Act 1919 (SA) s 64, s 65 and s 67; Probate Rules 2004 (SA) r 44; Guardianship and Administration Act 1993 (SA), referred to.
In the Estate of Sopru (dec'd) (1992) 165 LSJS 133; In the Estate of Freebairn (2005) 93 SASR 415; In the Estate of Marden [2008] SASC 312; IW v The City of Perth (1997) 191 CLR 1; New South Wales v Amery (2006) 230 CLR 174; Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231; Qantas Airways Ltd v Christie (1998) 193 CLR 280; Riddle v Riddle (1952) 85 CLR 202, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"beneficial and expedient so to do", "beneficial", "expedient"

In the Estate of KARL ALOIS RICHTER (DECEASED)
[2011] SASC 124
Testamentary Causes Jurisdiction
GRAY J.
Introduction

This is an application pursuant to section 67 of the Administration and Probate Act 1919 (SA) by an administrator 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. Section 65 requires an administrator to deliver property held on behalf of a beneficiary who is not sui juris to the Public Trustee.
On 28 April 2011, I granted the order sought. These are my reasons for that decision.
The Application
Karl Alois Richter, the deceased, died on 29 October 2009. He was survived by his wife, Margaretha Richter, and three children: the applicant – Dagmar Monika Caon – Karl Leopold Richter and Othmar Karl Richter. The will of the deceased appointed Margaretha as the sole executor and also made her the universal devisee and legatee.
Margaretha is aged 86 years. She has dementia and is unable to administer the estate. Accordingly she was unable to take the grant of probate. Mrs Caon 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 Margaretha during her incapacity. By affidavit dated 29 November 2010, Mrs Coan deposed to the facts giving rise to the within application.
On 1 September 2010 the Guardianship Board, after being satisfied that Margaretha was suffering mental incapacity within the meaning of the Guardianship and Administration Act 1993 (SA), made an order appointing Mrs Caon to be the administrator of Margaretha’s estate.[1] The administration order was made by the Guardianship Board subject to reporting requirements including the filing of annual accounts with both the Board and the Public Trustee. The assets of Margaretha, which Mrs Coan now administers, consist principally of bank accounts totalling approximately $90,000.00. The estate of Margaretha is entitled to be refunded on her death part of an accommodation bond paid on her behalf to Resthaven Incorporated.
[1] By reason of legal incapacity on the part of Leopold and his subsequent death, an Enduring and General Power of Attorney executed on 28 October 1994 by Margaretha in favour of Mrs Coan and Leopold jointly, is inoperative.
The grant of letters of administration of the estate of the deceased was made on 23 November 2010. The net estate of the deceased disclosed in the statement of assets and liabilities records a value of $94,164.72. The sole significant asset of the estate is an entitlement to be paid a refund of an accommodation bond from Resthaven, together with accrued interest. Administration of the estate has been largely completed.
As mentioned, Mrs Caon now seeks an order under section 67 of the Administration and Probate Act that she not be bound by section 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:
(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.
[Emphasis added.]
Section 65 has been considered in two decisions of this Court in In the Estate of Sopru[2] and In the Estate of Freebairn.[3]I will return to these decisions later in these reasons.
[2] In the Estate of Sopru (dec’d) (1992) 165 LSJS 133.
[3] In the Estate of Freebairn (2005) 93 SASR 415.
Section 67(1) provides a dispensing power and is relevantly in the following terms:
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.
Mrs Coan deposed that it is her intention, were the Court to make the order sought pursuant to section 67 of the Act, to pool the funds due to Margaretha with respect to the estate of the deceased, after deducting legal and administrative expenses, with the funds of Margaretha which she is now managing in accordance with the Administration Order of the Guardianship Board.
Mrs Caon is aged 56 years and is a qualified physiotherapist employed on a part time basis. She has two children and is capable of managing the funds of the estate due to Margaretha on her behalf. She is the sole living child of Margaretha; Leopold having died on 3 April 2011 and Othmar being a child of the deceased, but not Margaretha. The Public Trustee, Othmar and representatives of Leopold have been advised of the application and have not objected to the order sought.
As extracted, section 67 provides that a Judge may, on being satisfied that it is “beneficial and expedient so to do”, order that an administrator not be bound by section 65. Mrs Coan contended that an order should be made that she not be bound by section 65 of the Act, as the protection afforded by section 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. Before turning to address this contention and the merits of the application, it is appropriate to first say something about the legislative scheme concerning the relevant provisions of the Administration and Probate Act.
Section 65 seeks to protect a person where an administrator, not an executor, has been appointed by the Court to administer an estate and 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 section 67 of the Act, Parliament conferred on the Court the power to relieve the administrator from the obligation under section 65 when it is “beneficial or expedient so to do”.
Counsel for Mrs Coan submitted that the words “beneficial or expedient so to do” enable the Court to dispense with the section 65 requirement in circumstances where the protection afforded by section 65 is not necessary.
It is clear that section 65 has, at least in part, a beneficial and remedial purpose.[4] It is settled that beneficial and remedial legislation is to be interpreted as widely as its terms permit.[5]
[4] 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]].”
[5] In this respect, Brennan CJ and McHugh J in IW v City of Perth (1997) 191 CLR 1 at 12 outlined the approach to be taken to the construction of beneficial or remedial statutory provisions:
“[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.]
New South Wales v Amery (2006) 230 CLR 174, [138] (Kirby J) citing Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231, 260-261 and Qantas Airways Ltd v Christie (1998) 193 CLR 280, [152].
In In the Estate of Freebairn,[6] an application was made pursuant to section 31(10) of the Administration and Probate Act for an order dispensing with the requirement that the administrator provide a surety in accordance with the obligation under section 31(1) of the Administration and Probate Act. In that decision, Besanko J considered the meaning of the phrase “beneficial or expedient” where section 31(10) provided a judicial discretion to dispense with the requirement to provide a surety upon being satisfied that it was “beneficial or expedient to do so”. Besanko J, referring to observations of Dixon and Williams JJ in Riddle v Riddle,[7] discussed the meaning of the expression and observed:[8]
The criterion in s 31(10) of the [Administration and Probate Act] is what is “beneficial” or “expedient”. As far as the word “expedient” is concerned, that has been said to be a criterion of the widest and most flexible kind: Riddle v Riddle (1951) 85 CLR 202 per Dixon J (as he then was) at 214. In the same case, Williams J said (at 221–222) that the ordinary natural grammatical meaning of “expedient” is “advantageous”, “desirable”, “suitable to the circumstance of the case”.
It seems to me that the criterion requires a careful consideration of the facts of the particular case, and the important consideration is the due and proper administration of the estate. If the particular circumstances of the case suggest that there is a reduced risk of maladministration or less difficulty is likely to be encountered in recovering loss and damage, should there be maladministration, and there are disadvantages or detriments associated with the provision of a guarantee, then the court may form the view that it is beneficial or expedient to dispense with the requirement of a guarantee.
[Emphasis added]
[6]    In the Estate of Freebairn (2005) 93 SASR 415.
[7]    Riddle v Riddle (1952) 85 CLR 202.
[8]    In the Estate of Freebairn (2005) 93 SASR 415, [24]-[25]. See also Re Estate of Sopru(dec’d) (1992) 165 LSJS 133, 145-148.
After a consideration of these principles in In the Estate of Marden,[9] I concluded that an order postponing the realisation of estate property made under section 64 of the Administration and Probate Act, requiring that the Court first think it “beneficial so to do”, calls on the Court to consider whether the making of an order under that section will be of advantage to the due and proper administration of the estate. However, in my view this is not the only consideration. There are important differences between the use of the phrase “beneficial so to do” as it appears in various Acts and places in Acts. In particular, it is noteworthy that section 65 of the Administration and Probate Act contemplates the conveying of property when it belongs to a person, which must be after completion of the administration of the estate. Accordingly, the section requires, or at the very least allows, the Court to contemplate considerations other than the due administration of the estate. In my view, the key consideration in the within application is whether a beneficiary who is not sui juris is properly protected.
[9] In the Estate of Marden Deceased [2008] SASC 312.
“Beneficial” or “expedient” are the relevant criteria for determining if a dispensation should be granted. In In the Estate of Freebairn, Besanko J referred to the earlier decision of Legoe J in In the Estate of Sopru,[10] before observing the following with respect to the relevant criteria as they applied in those two decisions:[11]
…In Sopru, the conveyance or transfer of all the property to the Public Trustee would have incurred a considerable amount of conveyancing work and costs. In that case, the estate consisted of real estate and an air charter company. Legoe J found that the administratrix was well qualified to manage and control the company, in which she had a substantial financial interest. Legoe J said that if all of the assets were transferred to the management and control of the Public Trustee, the Public Trustee would have to contract out the control of the business, and that the only logical person to contract out to would be the applicant herself. Legoe J also referred to the capital commission and income commission which would be payable to the Public Trustee. Even though he referred to that as a relevant matter, he considered that it was expedient to make the order because the applicant was capable of continuing to operate the businesses, was especially qualified to do so, and would be able to maintain a reasonably conservative cost structure for the operations.
In this case, I think it is beneficial or expedient to dispense with compliance with s 65. Prior to the testator's death, he and Bruce and Bruce's wife were 50/50 co-owners of certain farming plant and equipment, which they shared in the operation of their respective farming businesses that were conducted on nearby parcels of land. Since the testator's death, Bruce has continued the farming operations previously conducted by the testator. He has arranged for crops grown by the testator to be harvested, and he has negotiated a loan facility with the National Australia Bank Limited. Bruce is well qualified to conduct the farming business.
[10] In the Estate of Sopru (dec’d)(1992) 165 LSJS 133.
[11] In the Estate of Freebairn (2005) 93 SASR 415, [39]-[40].
Conclusion
I consider that the beneficiary of the estate, Margaretha, is appropriately protected by reason of Mrs Caon, Margaretha’s sole living child, being empowered by the Guardianship Board to administer the estate of Margaretha. I am satisfied that it is beneficial or expedient to order that Mrs Coan not be bound by section 65 of the Administration and Probate Act. This is particularly so, as Mrs Coan, as the administrator of the protected estate of Margaretha, is fully capable of properly managing the funds due to Margaretha. Further, it would be beneficial to the interests of Margaretha that commission to the Public Trustee not be paid. Finally, it would be beneficial to the interests of Margaretha and expedient that the funds due to Margaretha be joined with the funds of the protected estate administered by Mrs Coan.
It is for these reasons that I made the order dispensing with the obligation on the part of Mrs Coan to comply with the requirements of section 65 of the Administration and Probate Act.