MARDEN DECEASED

Case [2008] SASC 312

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 312

Testamentary Causes Jurisdiction

GRAY J.

  1. 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

  2. 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…

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MARDEN DECEASED [2008] SASC 312
Case
[2008] SASC 312
Decision Date

CaseChat Overview and Summary

In the matter of Marden Deceased, the deceased died intestate, leaving behind a widow and an infant child. The principal asset of the estate was the former matrimonial home. The widow, acting as the administrator of the estate, sought to postpone the realisation of the real estate until the infant child reached the age of 18 due to insufficient cash assets to realise the infant child's share of the estate. The administrator proposed that the Public Trustee accept a 40 per cent interest in the matrimonial home as the infant child's share of the estate, which was accepted by the Public Trustee. The administrator applied for an order to postpone the realisation of the matrimonial home until the infant child turned 18.

The legal issues before the court were whether the application to postpone the realisation of the real estate until the infant child reached the age of 18 was meritorious and beneficial to the administration of the estate. The court considered the discretion under section 64 of the Administration and Probate Act and whether making an order would be advantageous to the due and proper administration of the estate.

The court held that the application was meritorious and to the advantage of the administration of the estate. The court considered the value of the property, the agreement between the widow and the Public Trustee regarding the infant child's entitlement to the estate, the avoidance of emotional upset and disruption to the family, and the lack of opposition from the Public Trustee. The court exercised its discretion under section 64 of the Administration and Probate Act and made an order allowing the administrator to postpone the realisation of the real estate until the infant child reached the age of 18. The court also made orders regarding the maintenance of the property, insurance, rates, taxes, charges, outgoings, and the deposit of the duplicate Certificate of Title and insurance policies with the Public Trustee. The costs of the application were to be paid out of the estate of the deceased.

The court's decision was based on the principle that the expression "thinks it beneficial to do so" in section 64 of the Administration and Probate Act requires a careful consideration of the facts of the particular case and the due and proper administration of the estate. The court considered the advantages and detriments associated with the provision of a guarantee and whether the making of an order would reduce the risk of maladministration or less difficulty in recovering loss and damage. The court concluded that the grant of permission would allow the widow and the infant child to continue to reside in the matrimonial home, thereby avoiding unnecessary emotional upset and allowing the continuity of ongoing family life. The court also noted that the grant of permission would avoid costs and disruptions involved in selling the property and finding new accommodation.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

GRAY J
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; andooccupy 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; andopay 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.

Ratio Decidendi

Legal Principle Established

Established by: GRAY J

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].