In the Estate of SAMUEL ZACHARY KELLETT (DECEASED)
[2019] SASC 163
•13 September 2019
SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction: Application)
In the Estate of SAMUEL ZACHARY KELLETT (DECEASED)
[2019] SASC 163
Judgment of The Honourable Justice Stanley
13 September 2019
SUCCESSION - ADMINISTRATION OF ESTATE - DISTRIBUTION - MATTERS RELATING TO BENEFICIARIES
On 7 August 2019 this Court made an order pursuant to s 67 of the Administration and Probate Act 1919 (SA) (the Act) relieving the plaintiff, as the administrator of the intestate estate of Samuel Zachary Kellett (deceased) from being bound by the requirements of s 65 of the Act in respect of the property comprising the interest of David Mostyn Kellett in the estate of the deceased. This Court further ordered that the plaintiff’s costs of and incidental to the summons be paid out of the estate of the deceased and that the plaintiff and the Public Trustee have liberty to apply. Those orders were made to operate as and from 14 December 2017 nunc pro tunc. These are the Court’s reasons for making those orders.
Administration and Probate Act 1919 (SA) s 65, s 67, referred to.
In the Estate of Richter (Deceased) (2011) 276 LSJS 324; In the Estate of Dixon (Deceased) [2019] SASC 87, applied.
In the Estate of SAMUEL ZACHARY KELLETT (DECEASED)
[2019] SASC 163Testamentary Causes Jurisdiction
STANLEY J: In this matter, on 7 August 2019 I made an order pursuant to s 67 of the Administration and Probate Act 1919 (SA) (the Act) relieving the plaintiff, as the administrator of the intestate estate of Samuel Zachary Kellett (deceased) from being bound by the requirements of s 65 of the Act in respect of the property comprising the interest of David Mostyn Kellett in the estate of the deceased. I further ordered that the plaintiff’s costs of and incidental to the summons be paid out of the estate of the deceased and that the plaintiff and the Public Trustee have liberty to apply. I made those orders to operate as and from 14 December 2017 nunc pro tunc.
These are my reasons for making those orders.
The plaintiff, Ann Denise Kellett, was the mother of the deceased, Samuel Kellett. The deceased died on 8 February 2014. The estimated worth of his estate was approximately $196,855.
The plaintiff was appointed the administrator of the estate of Samuel Kellett pursuant to a grant of letters of administration dated 2 November 2017.
The plaintiff is also the wife of David Kellett and is the protector of his estate pursuant to an order made by the District Court on 4 February 2002 and subsequently varied on 29 June 2017. Since the variation of the protection order in 2017, the plaintiff and Steven Wild have been joint managers of the estate of David Kellett. Mr Wild is a chartered accountant.
David Kellett is not sui juris as a result of injuries suffered in a motor vehicle accident in 1996. David obtained an award of damages for the injuries suffered in that accident in an amount of $2,200,000. From 4 February 2002 to 29 June 2017 the plaintiff, together with Brenton Ellery, a chartered accountant, was responsible for the management of David’s estate. Since 29 June 2017 the plaintiff and Mr Wild have continued to manage the estate.
The persons entitled to a share in the estate of Samuel Kellett are the plaintiff and her husband. After expenses, the amount available for distribution to David Kellett from his son’s estate was $81,000. On 14 December 2017 a solicitor paid David Kellett’s interests in the deceased’s estate to the plaintiff by way of a trust account cheque in the name of David Kellett. On the same day the solicitor paid $10,000 to the plaintiff by way of a trust cheque in the name of David Kellett for the refund of the deceased’s funeral expenses which were paid by David. The moneys from the deceased’s estate which were paid to the plaintiff for the benefit of her husband were banked into a Macquarie cheque account in the name of Ann Kellett and Steven Wild, as trustees for the estate of David Kellett. These moneys were deposited with the protected funds of David Kellett’s estate. As at 30 June 2018 the balance of those funds was $2,110,183.49.
Mr Wild’s firm charges fees in relation to the administration of David Kellett’s estate. Those fees are charged on an hourly basis rather than on a percentage of assets. In the financial year ending 30 June 2017 those fees were $14,000. In the financial year ending 30 June 2018 those fees were $15,750. In addition, in the 17/18 financial year additional fees for instructing and attending upon a financial planner were incurred in an amount of $4,050.
Since 14 December 2017 the estate funds have been mixed with the protected funds. This occurred in contravention of s 65 of the Act. Accordingly, the fund applied to the Court that the order pursuant to s 67 to be made retrospective to 14 December 2017.
In the circumstances, I was satisfied that it was appropriate to make an order pursuant to s 67 relieving the plaintiff of the obligation to pay David Kellett’s share of his son’s estate to the Public Trustee and that the Court should grant such dispensation retrospectively.
The purpose of s 65 and s 67 of the Act is protective.[1]
[1] In the Estate of Richter (Deceased) (2011) 276 LSJS 324 at [17].
On the evidence, I was satisfied that it was both beneficial and expedient to make the orders sought.
The Public Trustee did not oppose the Court making the orders.
I was satisfied that the interests of David Kellett will be properly protected by making the dispensing order.
David Kellett’s estate is being appropriately managed by the plaintiff and Mr Wild and I accept that it is expedient to have all of the funds under management managed by one manager. The Public Trustee would charge fees to manage David Kellett’s interests in the deceased’s estate which would reduce the benefit he would otherwise receive. The Public Trustee would also charge capital commission together with interest commission and an administration and audit fee in addition to the charges which are payable in relation to David Kellett’s current protection order. This would involve unnecessary expense. The current arrangements in relation to the administration of David Kellett’s estate are sound and beneficial. The benefit of having the funds managed together with the protected estate avoids the duplication of administration time and fees; permits the combination of funds into one portfolio for the purpose of maximising investment returns; provides David Kellett with peace of mind of knowing that he only has to deal with one administrator; and gives him the reassurance that comes from dealing with one fund manager with whom he has developed a trusted relationship.
There can be no doubt that the Court has power to make a dispensing order pursuant to s 67 which operates retrospectively.[2]
[2] In the Estate of Dixon (Deceased) [2019] SASC 87.
There was nothing to indicate that the contravention of s 65 was the result of any contumelious conduct. I was satisfied it was appropriate to make the order pursuant to s 67 to operate on and from 14 December 2017.
0