In the Estate of RAYMOND CHARLES ESTALL (DECEASED) - [2011] SASC 188

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction: Application)
In the Estate of RAYMOND CHARLES ESTALL (DECEASED)
[2011] SASC 188
Reasons for Decision of The Honourable Justice Gray
25 October 2011
SUCCESSION - EXECUTORS AND ADMINISTRATORS - ADMINISTRATION - DISTRIBUTION - GENERALLY
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 and deliver property 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 has enduring power of attorney of her mother's affairs.
Held: Application granted - the beneficiary of the estate is appropriately protected - beneficial to the estate and to the interests of the beneficiary of the estate that dispensation order be made.
Administration and Probate Act 1919 (SA) ss 65, 67, referred to.
In the Estate of Marden [2008] SASC 312; In the Estate of Richter [2011] SASC 124; IW v City of Perth (1997) 191 CLR 1; New South Wales v Amery (2006) 230 CLR 174; In the Estate of Freebairn (2005) 93 SASR 415; Riddle v Riddle (1952) 85 CLR 202; In the Estate of Sporu (dec'd) (1992) 165 LSJS 133, considered.

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

In the Estate of RAYMOND CHARLES ESTALL (DECEASED)
[2011] SASC 188
TESTAMENTARY CAUSES
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 and deliver property to the Public Trustee in accordance with section 65 of the Act. Section 65 requires an administrator to deliver property to the Public Trustee, where that property is held on behalf of a beneficiary who is not sui juris.
On 21 February 2011, I granted the order sought. These are my reasons for that decision.
The Application
Raymond Charles Estall, the deceased, died on 9 February 2010. The deceased left a will dated 25 November 1998 under which Mrs Estall was the sole executor, trustee and beneficiary. On 27 August 2010 an order was made by the Registrar of Probates that letters of administration with the will annexed be granted to Ann Elizabeth Christian, the applicant, for the use and benefit of Yvonne Leslie Estall during her incapacity. Mrs Estall is mentally incapable of managing her affairs due to dementia. She is the wife of the deceased, and the applicant is their daughter. The deceased and Mrs Estall also have a son, Graham Leslie Estall.
Mrs Estall executed a will on 25 November 1998. The terms of that will appoint the applicant and Graham as executors in circumstances where she survives her husband. Since the deceased died, Mrs Estall has not remarried and does not have a spouse. By reason of her mental incapacity, she is not able to execute a further will.
By virtue of Mrs Estall’s last will, the applicant and Graham would be entitled to apply to the Registrar of Probates to be the executors of Mrs Estall’s estate. According to the terms of Mrs Estall’s will, the only persons entitled to share in her estate are the applicant, Graham and the adult children of Martin John Estall, who is a son of the deceased and Mrs Estall, and who died in 1996. Graham and two of the children of Martin have consented to the within application.
It is to be observed that the applicant is appointed Mrs Estall’s attorney by virtue of an enduring power of attorney dated 25 November 1998, and has since 2007 attended to all matters of a financial nature for the deceased and Mrs Estall. As attorney, the applicant is currently managing a number of Mrs Estall’s assets, including approximately $116,000.00 in an accommodation bond at an aged care facility, approximately $95,000.00 in an investment with Credit Union Services Corporation, approximately $22,000.00 invested with Australian Central Credit Union and a variety of shareholdings totalling approximately $180,000.00. Mrs Estall receives an income from a variety of sources including an ‘SA Super’ superannuation reversionary pension, Centerlink, dividends from her shareholding and bank interest from savings. She has no liabilities and her expenses are minimal; aged care facility board, private health insurance, Telstra and medical expenses. The income generated from Mrs Estall’s assets are sufficient to meet her needs.
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:[1]
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.[2] It is settled that beneficial and remedial legislation is to be interpreted as widely as its terms permit.[3]
[1]    In the Estate of Richter [2011] SASC 124, [13]-[15].
[2]    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]].”
[3]    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,[4] 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:[5]
[4]    In the Estate of Richter [2011] SASC 124.
[5]    In the Estate of Richter [2011] SASC 124, [16]-[18].
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]
[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.
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,[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.
“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.
[Emphasis added.]
[9]    In the Estate of Marden [2008] SASC 312.
[10] In the Estate of Sopru (dec’d) (1992) 165 LSJS 133.
[11] In the Estate of Freebairn (2005) 93 SASR 415, [39]-[40].
In the present proceeding, the applicant deposed to the particulars of her role as attorney in the management of the affairs of Mrs Estall and the affairs of the deceased when he was alive. It is apparent from her evidence that she has had detailed and ongoing oversight and involvement in the financial affairs of Mrs Estall. For example, in respect of share portfolios, the applicant deposed to each year reviewing the investments and ensuring that they were performing to the benefit of Mrs Estall. The applicant clearly comprehends the size and nature of Mrs Estall’s assets and the responsibilities attending the proper management of Mrs Estall’s financial affairs. The applicant works full time in a professional capacity and, between herself and her husband, they are financially secure.
If the balance of the estate of the deceased were to be conveyed to the Public Trustee, a commission would be charged on capital and on income. On the other hand, the applicant, as attorney, is already handling the financial affairs of Mrs Estall without charge and has deposed that she will continue to do so. It is to be observed that Mrs Estall has reposed trust and confidence in the applicant to administer her affairs. The applicant is capable of continuing to manage those affairs, particularly in respect of the funds to be received from the estate of the deceased as well as administering Mrs Estall’s affairs generally. I am of the opinion that the beneficiary of the estate, Mrs Estall is appropriately protected by the making of a dispensing order. I consider that it would be beneficial to Mrs Estall to have the funds received from the estate of the deceased administered by the applicant, without charges being incurred by the Public Trustee. I am satisfied that it is beneficial to order that the applicant not be bound by section 65 of the Administration and Probate Act.
It is for these reasons that I made the order dispensing with the obligation on the part of the applicant to comply with the requirements of section 65.