IN THE ESTATE OF LANG (DECEASED) - [2022] SASC 112

Supreme Court of South Australia
(Testamentary Causes Jurisdiction)
IN THE ESTATE OF LANG (DECEASED)
[2022] SASC 112
Judgment of the Honourable Justice Stanley
13 October 2022
SUCCESSION - ADMINISTRATION OF ESTATE - DISTRIBUTION - MATTERS RELATING TO BENEFICIARIES
The applicant, in her capacity as the administratrix, seeks an order pursuant to s 67 of the Administration and Probate Act 1919 (SA) dispensing with the obligation to comply with the requirements of s 65 of the Administration and Probate Act 1919 (SA).
The sole beneficiaries of the deceased’s estate are the children. The uncle of the children seeks orders, inter alia, that the children be joined to the proceedings and that he be appointed their litigation guardian.
Held:
1. The application pursuant to s 67 of the Administration and Probate Act 1919 (SA) to dispense with the obligation to comply with the requirements of s 65 of the Administration and Probate Act 1919 (SA) is allowed.
2. The application to join the children to the proceedings and appoint their uncle as their litigation guardian is dismissed.
3. The application by the administratrix for costs against the proposed litigation guardian is dismissed.
Administration and Probate Act 1919 (SA) ss 65 and 67; Trustee Act 1936 (SA); Wills Act 1936 (SA) s 20A, referred to.
In The Estate of Estall (Deceased) [2011] SASC 188, considered.

IN THE ESTATE OF LANG (DECEASED)
[2022] SASC 112
Testamentary causes jurisdiction
STANLEY J:
Background

Clayton Miles Cooper Lang (the deceased) died in the Kangaroo Island bushfires on 3 January 2020. He left a will dated 26 August 2010 (the will) and is survived by his two children, Sophia Iris Carolyn Lang born 4 July 2010 and Madeleine Ella Jean Lang born 5 February 2014 (the children).
By his will, the deceased appointed his wife Christie Joy Lang (Christie Lang), the mother of the children, as his executor and trustee. In the event that she was unable or unwilling to act, the deceased substituted as his executor such of his parents, Richard Lang and Helen Lang as were willing and able to act. At the date of his death, the deceased and Christie Lang were divorced. By reason of the divorce and the operation of s 20A(1)(b) of the Wills Act 1936 (SA) (Wills Act), Christie Lang is precluded from taking up the appointment of executrix of the deceased’s estate.
Richard Lang also died in the Kangaroo Island bushfires on 3 January 2020. The circumstances of the death of both the deceased and his father make it impossible to determine the order of death as between the deceased and Richard Lang. By reason of the divorce of the deceased and Christie Lang, and the effect of s 20A(1)(a) of the Wills Act, the sole beneficiaries of the deceased’s estate under the will are the children.
On 15 September 2020, the Court made orders for a grant of letters of administration with will annexed to Helen Lang (the administratrix). The administratrix is the deceased’s mother. On 5 April 2022, the Court gave advice and direction pursuant to s 69 of the Administration and Probate Act 1919 (SA) (the Act) concerning separate proceedings in the Federal Circuit Court and Family Court of Australia and in this Court.
The administratrix, as one of the substituted executors appointed by the deceased in his will, made the application for a grant of letters of administration with the will annexed. As I have noted, that order was made on 15 September 2020. In the course of her administration of the estate, the administratrix, with the advice, direction and approval of this Court, has engaged in and concluded litigation on behalf of the estate in both this Court and the Federal Circuit and Family Court of Australia referred to above.
The resolution of each of the two separate proceedings involving the estate resulted in a consequent reduction in the net estate available for the benefit of the children. The administratrix submits that the net estate now stands in an amount of approximately $800,000. Of that amount approximately a half is retained by an entity, C Lang Investments Pty Ltd (the company). The administratrix is the current sole director and sole secretary of the company and holds the shares in the company on trust for the children. The estate held on trust by the administratrix comprises liquidated cash assets and an unliquidated entitlement to dividend distributions from the company.
On 4 April 2022, the administratrix brought an application pursuant to s 67 of the Act that she not be bound by the requirements of s 65 of the Act to pay the benefit share and interest of the children in the deceased’s estate to the Public Trustee.
Subsequently, Ashley Christopher Moule, the brother of Christie Lang and the uncle of the children, has brought an interlocutory application seeking orders, inter alia, that the children be joined to the proceedings and that he be appointed the children’s litigation guardian.
That application is opposed by the administratrix. She has sought an order that the Public Trustee be joined to the interlocutory application brought by Mr Moule and the application pursuant to s 67 of the Act. Having heard from the Public Trustee, I grant that application.
Mr Moule seeks to have the children joined to the proceedings and to be appointed as their litigation guardian in order to protect their interests. Having heard from him, I have no doubt as to the sincerity and selflessness of his stance.
However, it is important to recognise that the proceeding which the Court must decide is the application by the administratrix pursuant to s 67 of the Act to be relieved of the obligation to comply with s 65 of the Act.
The role of the Public Trustee
Sections 65 and 67 of the Act are protective provisions in relation to the interests of vulnerable beneficiaries of administered estates who are not sui juris. Section 65 of the Act relevantly provides that the Public Trustee is the default statutory trustee of legacies due to persons who are not sui juris. Section 67 of the Act empowers the Court to make an order dispensing with the obligation imposed by s 65 of the Act where it is beneficial and expedient to do so. Accordingly, the attitude of the Public Trustee to applications pursuant to s 67 of the Act is sought by the Court as a matter of course in order to ascertain its position in relation to the proposed alternative to the Public Trustee acting as the trustee of the beneficiaries’ interests in the estate.
Joinder of the children
In an appropriate case, it is within the Court’s power to join non sui juris beneficiaries to an application pursuant to s 67 of the Act and appoint litigation guardians for that purpose.
However, in this case, a sufficient basis has not been established to justify the making of such orders. At present the material before the Court does not indicate any real role for the children, through a litigation guardian, to play in the disposition of the application pursuant to s 67 of the Act. To the extent that there needs to be a party protecting the interests of the children beyond the scrutiny of the Court, that role is fulfilled by the Public Trustee. There would need to be particular circumstances where there was some fact or matter beyond immediate ‘interest’ where the non sui juris beneficiaries, the subject of s 65 of the Act, would need to be joined. No such circumstances have been demonstrated to exist at this stage.
Instead, the Public Trustee submits that no proper basis has been established justifying the joinder of the children to the application pursuant to s 67 of the Act.
In the circumstances I decline to join the children as parties to the application. Accordingly, there is no need for Mr Moule to be appointed as their litigation guardian.
Consideration of the application pursuant to s 67 of the Act
In In The Estate of Estall (Deceased) Gray J considered the statutory scheme established by ss 65 and 67:[1]
[1] [2011] SASC 188 at [7]-[10].
It is convenient now to turn to sections 65 and 67 of the Administration and Probate Act. 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 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.
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. Recently, in In the Estate of Richter I had cause to consider these provisions, and made the following observations regarding the scheme of the provisions:[2]
[2]     In the Estate of Richter [2011] SASC 124, [13]-[15].
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”.
…
It is clear that section 65 has, at least in part, a beneficial and remedial purpose.[3] It is settled that beneficial and remedial legislation is to be interpreted as widely as its terms permit.[4]
[3]     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]].”
[4]     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 Richter,[5] I discussed the relevant authorities and concluded that the key consideration in that application was whether a beneficiary who is not sui juris would be properly protected by the proposed dispensing order sought. It is worth repeating that discussion:[6]
[5]     In the Estate of Richter [2011] SASC 124.
[6]     In the Estate of Richter [2011] SASC 124, [16]-[18].
In In the Estate of Freebairn,[7] 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,[8] discussed the meaning of the expression and observed:[9]
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]
After a consideration of these principles in In the Estate of Marden,[10] 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.
“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,[11] before observing the following with respect to the relevant criteria as they applied in those two decisions:[12]
…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.
[Emphasis added.]
[7]     In the Estate of Freebairn (2005) 93 SASR 415.
[8]     Riddle v Riddle (1952) 85 CLR 202.
[9]     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.
[10] In the Estate of Marden [2008] SASC 312.
[11] In the Estate of Sopru (dec’d) (1992) 165 LSJS 133.
[12] In the Estate of Freebairn (2005) 93 SASR 415, [39]-[40].
The administratrix submits that if the application pursuant to s 67 of the Act is not granted and the liquidated cash asset is passed to the Public Trustee, the Public Trustee will be required to invest and administer the asset over a lengthy period of time. In that event, the Public Trustee will be entitled to charge a fee. Despite the lengthy and particularly complex administration of the estate, the administratrix has not made an application for, nor signalled an intention to make an application for payment of a commission. I am satisfied the involvement of the Public Trustee in the administration of the estate over an extended period of time is likely to erode the estate by reason of the fees and charges that the Public Trustee will be permitted to make against the trust for that involvement.
The administratrix submits that the Public Trustee is entitled to charge a capital commission calculated on the gross capital value of the estate. For an estate with a capital value in excess of $600,001 the commission would be charged at a rate of $19,800 plus 1.1 cents for every dollar above $600,000. The present capital value of the estate as deposed by the administratrix is $800,000. The likely commission is in the vicinity of $22,000. In addition to the capital commission, the Public Trustee is entitled to charge an income commission at 5.5% on all income received by the estate. This includes income on investments or income from a business. In addition, the Public Trustee will charge an annual fee of $183 as an administration and audit fee. In the event that there are taxation returns required to be completed, then the Public Trustee will charge further fees for the preparation of tax returns. Those fees will be charged at a rate of $249 per hour. The Public Trustee will charge a funds management fee which is calculated on the value of each fund as at the first business day of each month at an effective rate of one twelfth of 1.025% inclusive for fixed interest funds and 1.23% for growth common funds.

The administratrix has sought the advice of the deceased’s accountant in regard to the most beneficial manner of realising the asset which remains in the company and is prepared to act on that advice. The administratrix has taken steps to obtain advice as to the appropriate form of investment of the minority entitlement and is prepared to act on the advice of a suitably qualified advisor. The anticipated fees and charges of accounting and financial advice are likely to be substantially less than the fees and charges that the Public Trustee will charge.
The Public Trustee does not oppose the Court making the order sought pursuant to s 67 of the Act.
All of these factors support the Court making an order relieving the administratrix of the obligation to pay the children’s interest in the estate to the Public Trustee. I am satisfied it would be beneficial to the children to have the funds received from the estate of the deceased managed by the administratrix avoiding charges and fees being incurred by the Public Trustee. I consider that it is beneficial to order that the administratrix not be bound by s 65 of the Act. The interests of the children are appropriately protected by making the dispensing order.
In the future, should the children be concerned that the administratrix is failing to act in accordance with her fiduciary duties, they have remedies under the Trustee Act 1936 (SA) and at common law.
In addition, the Public Trustee is empowered to continue to exercise oversight of the interests of non sui juris beneficiaries subsequent to the making of an order pursuant to s 67 of the Act. That will be a matter for the Public Trustee in the future.
Mr Ower KC, for the administratrix, has advised the Court that in the future, if there are concerns on the part of the children or their guardian as to the administration of the estate the administratrix is prepared to provide information to address those concerns.[13] In my view that is appropriate.
[13] Transcript 26 September 2022 p 21.
In these additional ways the interests of the children will be protected.
Accordingly, I make an order pursuant to s 67 of the Act dispensing with the obligation on the part of the administratrix to comply with the requirements of s 65 of the Act.
Costs
In this matter, the estate has incurred the costs of dealing with the applications for the children to be joined to the proceedings and a litigation guardian appointed. The administratrix seeks an order for costs against Mr Moule to prevent the value of the estate being depleted by those costs. I accept that the application brought by Mr Moule was motivated by a genuine concern for protecting the interests of the children. It appears that attempts made by him on behalf of the children to ascertain information concerning the administration of the estate were not addressed satisfactorily by the administratrix. It is unlikely that the additional costs incurred as a result of the application brought by Mr Moule are substantial. The depletion of the estate as a result of his application is likely to be modest.
In the particular circumstances of this case I decline to make an order that Mr Moule meet the administratrix’s costs of his application.