MARDEN DECEASED
[2008] SASC 312
•14 November 2008
SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction: Application)
In the Estate of MARDEN DECEASED
[2008] SASC 312
Judgment of The Honourable Justice Gray
14 November 2008
SUCCESSION - EXECUTORS AND ADMINISTRATORS - ADMINISTRATION - ASSETS
SUCCESSION - EXECUTORS AND ADMINISTRATORS - ADMINISTRATION - DISTRIBUTION
Deceased died intestate and was survived by his widow and infant child – the most substantial asset of the estate was the former matrimonial home – pursuant to section 72G of the Administration and Probate Act, $10,000 and one-half of the balance of the intestate estate, was to be distributed to the widow of deceased, and the balance of intestate estate was to be distributed to the deceased’s infant child – pursuant to section 65 of the Administration and Probate Act, the administrator was obliged to transfer the infant child’s share of the estate to Public Trustee – Administrator advised that there were was insufficient cash assets to realise infant child’s share of estate, and proposed that Public Trustee accept 40 per cent interest in matrimonial home as infant child’s share of estate – proposal accepted by Public Trustee – Administrator applied for an order postponing the realisation of matrimonial home until infant child turned 18.
Held: application allowed – order pursuant to section 64 is meritorious and to the advantage to the administration of the estate.
Administration and Probate Act 1891 (SA) s 81; Administration and Probate Act 1919 (SA) s 64, s 65 and s 72G; Administration and Probate Act 1929 (ACT) s 51A(1)(a); Administration and Probate Act 1935 (Tas) s 33(1); Administration and Probate Act 1958 (Vic) s 38(1); Administration and Probate Act 1969 (NT) s 83(1)(a) and s 83(3); The Probate Rules 2004 (SA) r 77; Trustee Act 1925 (ACT) s 81(2)(b); Trustee Act 1925 (NSW) s 27B(1) and s 81(2)(b); Trustee Act 1936 (SA) s 59B(4); Trustees Act 1962 (WA) s 27(1)(c); Trusts Act 1973 (Qld) s 32(1)(c), referred to.
Benjamin v Sanders (1891) 17 VLR 69; Perpetual Trustee Co Ltd v Noyes (1925) 42 WN (NSW) 56; Re McComb [1993] 3 VR 485; State of 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; IW v City of Perth (1996) 191 CLR 1; In the Estate of Freebairn (2005) 93 SASR 415; Re Estate of Sopru, deceased (1992) 165 LSJS 133; Public Trustee v O'Donnell (2008) 101 SASR 228, considered.
WORDS AND PHRASES CONSIDERED/DEFINED
"beneficial"
In the Estate of MARDEN DECEASED
[2008] SASC 312Testamentary Causes Jurisdiction
GRAY J.
This is an application by the administrator of an intestate estate, for permission to postpone the realisation of an asset of the estate, pursuant to section 64 of the Administration and Probate Act 1919 (SA).
Introduction
The deceased, Dean Gary Marden, died on 19 September 2007 at Port Augusta, aged 37 years. He is survived by his widow, Gail Margaret Marden, and his seven year-old daughter, Aimee Jaycee Marden.
A grant of letters of administration of the deceased’s estate was made to Mrs Marden on 31 January 2008. A statement of assets and liabilities filed in support of the grant, and further statement of additional assets and liabilities, discloses that the net value of the estate is $250,177.07. The assets of the estate include real property, a motor vehicle, a credit bank account and shares. The most significant asset of the estate is the former matrimonial home, situated at 3 Hanrahan Street, Port Augusta West (Certificate of Title Register Book Volume 5264 Folio 538) (“the Hanrahan Street property”). Mrs Marden and Aimee Marden reside at the Hanrahan Street property.
At the date of death, the Valuer-General valued the capital value of the land at 3 Hanrahan Street at $295,000. More recent appraisals from three real estate firms estimates the value at $367,500.
Pursuant to section 72G of the Administration and Probate Act which concerns distribution on an intestacy, Mrs Marden is entitled to the sum of $10,000 and to one-half of the balance of the intestate estate. Aimee Marden is entitled to the balance of the intestate estate. Pursuant to section 65 of the Administration and Probate Act, as Aimee Marden is an infant and is therefore not sui juris, Mrs Marden is obliged to deliver, convey or transfer Aimee Marden’s entitlement to Public Trustee, immediately after the expiration of one year from the date of the death of the intestate, 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.
The Application
On 2 July 2008, Mrs Marden’s solicitors wrote to Public Trustee advising of the assets of the estate for the purpose of the section 72G calculation:
1. Estate assets for the purpose of the Section 72G calculation are as follows:
1.1 Hanrahan Street: $ 367,500.00
1.2 PowerState Credit Union account $ 763.22
1.3 License refund $ 136.00
1.4 AXA Shares $ 2,978.30
1.5 Perpetual Investment Trust $ 8,891.37
Total:- $ 380,268.00
2. Liabilities
2.1 Public Trustee examination fee: $ 108.00
2.2 Funeral expenses: $ 4,296.00
2.3 Legal fees: $ 4,900.00
2.4 Appraisals $ 220.00
2.5 Probate office filing fee $ 629.00
2.6 PowerState Credit Union to pay out mortgage $ 63,697.00
2.7 Estimates further administration costs $ 1,100.00
Total:- $ 74,842.00
After applying Section 72G the child’s share is: $ 147,713.00
It was further advised that there were insufficient cash assets to pay out Aimee Marden’s share of the estate. A proposal was put forward that Public Trustee accept a 40 per cent interest in the Hanrahan Street property as Aimee Marden’s share of the estate. On 17 August 2008, Public Trustee, by letter to Mrs Marden’s solicitors, accepted this proposal.
On 10 September 2008, Mrs Marden applied by summons for an order under section 64 of the Administration and Probate Act, for permission to postpone the realisation of the Hanrahan Street property until such time as Aimee Marden turned 18.
Notice of the application has been served on Public Trustee, who does not oppose the order sought. If permission is granted, Public Trustee has requested that Mrs Marden lodge a duplicate certificate of title of the Hanrahan Street property with Public Trustee until Aimee Marden turns 18, and that a caveat be placed over the property in favour of Public Trustee as trustee for Aimee Marden.
On 23 October 2008, the Registrar of Probates, pursuant to Rule 77 of the The Probate Rules 2004 (SA), referred the application to a judge of this Court.
Legal Principles
The Supreme Court in its general administrative jurisdiction has power to relieve executors, trustees and administrators from their obligations at common law and under Statute. Section 64 of the Administration and Probate Act, which confers power of the Court to grant permission to postpone the realisation of the estate or trust property, is an example of this power. This power will be exercised cautiously, where the interests of justice so dictate.
Section 64 relevantly provides:
(1)The Court may, where it thinks it beneficial so to do, give permission to an executor, administrator, or trustee of a deceased person, or to the Public Trustee—
(a) to postpone for such period as the Court thinks expedient the realisation of the estate or trust property:
…
(2)An executor, administrator, or trustee acting in accordance with permission given under this section shall not be answerable for consequent loss, except in case of breach of trust, negligence, or wilful default.
(3)An order under this section may be made either without notice or on such notice as the Court in any case thinks proper, and may be varied from time to time as the Court thinks fit.
Section 64 of the Administration and Probate Act, has a progenitor in section 81 of the Administration and Probate Act 1891 (SA), which is in substantially similar terms.There are equivalent provisions to section 64 in the Australian Capital Territory and the Northern Territory.[1] In other State jurisdictions, personal representatives have a statutory power to postpone the realisation of trust property without the need for the Court’s permission.[2] Such a power must be exercised in good faith, with reference to relevant considerations including the rights of beneficiaries inter se.[3] It is also relevant to note that section 59B(2)(b) of the Trustee Act 1936 (SA) empowers the Court to authorise a trustee (which by section 4, includes a representative of a deceased person) to postpone the sale of trust property, where it is “expedient”.[4] This power does not derogate from the powers of the Supreme Court under its general administrative jurisdiction and under the Trustee Act or any other Act.[5]
[1] Administration and Probate Act 1929 (ACT), section 51A(1)(a); Administration and Probate Act 1969 (NT), section 83(1)(a), 83(3).
[2] Trustee Act 1925 (NSW), section 27B(1); Trusts Act 1973 (Qld), section 32(1)(c); Administration and Probate Act 1935 (Tas), section 33(1); Administration and Probate Act 1958 (Vic), section 38(1); Trustees Act 1962 (WA), section 27(1)(c).
[3] Benjamin v Sanders (1891) 17 VLR 69; Perpetual Trustee Co Ltd v Noyes (1925) 42 WN (NSW) 56.
[4] See also Trustee Act 1925 (ACT); section 81(2)(b); Trustee Act 1925 (NSW), section 81(2)(b).
[5]Trustee Act 1936 (SA), section 59B(4).
Section 64 confers power to grant the relevant permission where the Court “thinks it beneficial to do so”. Accordingly, section 64 has a beneficial and remedial purpose. A beneficial or remedial statutory provision is one that gives some benefit to a person and thereby remedies some injustice.[6] It is well established that beneficial and remedial legislation must be given a liberal construction, which constitutes “the widest interpretation which its language will permit”.[7] In IW v City of Perth,[8] Brennan CJ and McHugh J outlined the appropriate approach to statutory construction of beneficial and 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.
[6] Re McComb [1993] 3 VR 485 at [22].
[7] State of New South Wales v Amery (2006) 230 CLR 174 at [138] (Kirby J) citing Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 at 260–261 (McHugh J) and Qantas Airways Ltd v Christie (1998) 193 CLR 280 at [152] (Kirby J).
[8] IW v City of Perth (1996) 191 CLR 1 at 12 (Brennan CJ and McHugh J) (footnotes omitted).
In the context of the present case, the benefit afforded, and the injustice avoided by section 64 of the Administration and Probate Act, concerns the minimisation of disruption and inconvenience to the lives of the surviving spouse and dependent issue of the deceased, the promotion of the continuity of the lifestyle of these persons, and the acknowledgment of the importance of the matrimonial home in the life of the surviving spouse.
In In the Estate of Freebairn,[9] Besanko J considered the meaning of the phrase “beneficial or expedient” in the context of an application pursuant to section 31(10) of the Administration and Probate Act 1919 (SA), 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. 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 discussed the meaning of the expression and observed:[10]
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]
[9] In the Estate of Freebairn (2005) 93 SASR 415.
[10] In the Estate of Freebairn (2005) 93 SASR 415 at [24]-[25]. See also Re Estate of Sopru, deceased (1992) 165 LSJS 133 at 145-148.
In my view, this reasoning is apposite to an understanding of the meaning of the expression “thinks it beneficial to do so” in section 65 of the Administration and Probate Act. Accordingly, in exercising the discretion under section 64 of the Administration and Probate Act, the Court will consider whether the making of an order under this section will be of advantage to the due and proper administration of the estate.
The Merits
In the present case, the merits of the application are demonstrated by the following material facts:
-The value of the Hanrahan Street property has been confirmed by three independent appraisals;
-Mrs Marden and Public Trustee are in agreement that Aimee Marden’s entitlement to the estate equates to a 40 per cent share in the Hanrahan Street property;
-The grant of permission will allow Mrs Marden and Aimee to continue to reside in the matrimonial home, thereby avoiding unnecessary emotion upset and allowing the continuity of ongoing family life;[11]
-The grant of permission will avoid costs and disruptions involved in selling the property and finding new accommodation; and
-The order sought by Mrs Marden is not opposed by Public Trustee;
[11] Public Trustee v O'Donnell (2008) 101 SASR 228 at [77]; [103].
In these circumstances, I consider that it is beneficial to exercise my discretion under section 64 to postpone the realisation of the real property of the estate.
Conclusion
For these reasons, I make the following orders:
-Until the determination of this order or an order is made for the realisation and administration of the real estate of Dean Gary Marden, late of 3 Hanrahan Street, Port Augusta West in the State of South Australia, Disability Pensioner, deceased, the administrator of the estate of the deceased, Gail Margaret Marden, may:
opostpone the realisation of the real estate of the deceased namely the land comprised in Certificate of Title Register Book Volume 5264 Folio 538 (“the land”) until the infant child of the deceased, Aimee Jaycee Marden, shall have attained the age of 18 years; and
ooccupy the dwelling house erected on the land as a home for herself and the infant child of the deceased.
-During the continuance of this order, Gail Margaret Marden shall:
oinsure the premises presently erected upon the land to their full insurable value against loss or damage by fire, storm and tempest;
omaintain the premises in good and substantial repair and condition;
oduly and punctually pay and discharge all rates, taxes, charges and other outgoings accruing due in respect of the land; and
opay the premiums necessary for keeping and maintaining the improvements insured in accordance with the provisions of this order.
-By way of security for the share of the infant child in the estate of the deceased, Gail Margaret Marden do, upon the discharge of Memorandum of Mortgage Number 9198509 registered over the land, deposit with Public Trustee the duplicate Certificate of Title in relation to the land and the policy or policies or insurance issued in respect of the premises.
-Public Trustee be permitted to register a caveat over the title to the land in respect of the infant child’s interest, such caveat not to be warned by Gail Margaret Marden.
-The cost of the caveat, its ultimate discharge and transfer of the share of the infant child to Public Trustee is to be paid out of the estate of the deceased.
-Gail Margaret Marden, as administrator of the estate of the deceased, be not bound by Section 65 of the Administration and Probate Act 1919 (SA) as regards the land unless and until this order is determined.
-Upon the deposit of the duplicate Certificate of Title any surety to the bond given to Public Trustee upon the granting of Letters of Administration by this court to Gail Margaret Marden be discharged.
-Service of the summons on all persons in existence having any beneficial interest in the estate of the deceased, or the subject matter to which the summons relates be dispensed with.
-The costs of the application be paid out of the estate of the deceased.
-Gail Margaret Marden, Public Trustee and any other person interested may apply for further orders and directions.
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