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SUPREME COURT OF SOUTH AUSTRALIA (Testamentary Causes Jurisdiction: Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. In the Estate of GORDON STUART LEE (DECEASED)  SASC 139 Judgment of The Honourable Justice Stanley 17 August 2012 SUCCESSION - EXECUTORS AND ADMINISTRATORS - OTHER MATTERS 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 requirements to pay over money to the Public Trustee in accordance with section 67 of the Act - applicant obtained order for letters of administration of the estate of the deceased, the applicant's father, with the will annexed for the use and benefit of the universal devisee and legatee under the will, the applicant's mother. Held: Application granted. Beneficiaries of the estate properly protected - beneficial ro expedient to make order dispensing with obligation on part of applicant to comply with requirements of section 65. Administration and Probate Act 1919 (SA) s 31, s 56, s 65, s 67, referred to. IW v City of Perth (1997) 191 CLR 1; In the Estate of Freebairn (2005) 93 SASR 413; In the Estate of Richter (Deceased)  SASC 124, discussed. In the Estate of Raymond Charles Estall (Deceased)  SASC 188, considered. Applicant: ANTHONY REECE LEE Counsel: MR D HOWARD - Solicitor: GARY PEARCE Interested Party: PUBLIC TRUSTEE Counsel: MS J HILL - Solicitor: CROWN SOLICITOR FOR THE STATE OF SOUTH AUSTRALIA Hearing Date/s: 14/08/2012 File No/s: PROGR-12-822 B In the Estate of GORDON STUART LEE (DECEASED)  SASC 139 STANLEY J: Introduction 1 This is an application pursuant to s 67 of the Administration and Probate Act 1919 (SA) (“the Act”) by the administrator of a deceased’s estate for an order dispensing with the requirement to pay over money to the Public Trustee in accordance with s 65 of the Act. Section 65 requires an administrator to deliver property held on behalf of a beneficiary who is not sui juris to the Public Trustee. 2 Gordon Stuart Lee (“the deceased”) died on 14 December 2011. He was survived by his wife, Vera May Lee (“Vera”) and his son Anthony Reece Lee (“Anthony”), the applicant in this matter. Another son, Warrick Gordon Lee (“Warrick”) predeceased his father in January 2007, leaving a wife and two children who are all presently living. 3 The will of the deceased appointed Vera as the sole executor and also made her the universal devisee and legatee. 4 Vera suffers from dementia. She is unable to administer the estate. Accordingly, she was unable to take the grant of probate. Anthony applied for and received in her favour an order for letters of administration of the estate of the deceased with the will annexed for the use and benefit of Vera during her incapacity. By affidavits sworn by Anthony on 26 March 2012 and 28 June 2012 he deposed to the facts giving rise to the within application. 5 By a grant made in April 2006 Anthony was appointed Vera’s attorney pursuant to an enduring power of attorney. That grant has not been revoked subsequently. Anthony has tended to the day-to-day administration of his mother’s financial affairs since January 2010 due to her incapacity, and the inability of the deceased from that time to manage Vera’s financial affairs. 6 The assets of Vera consist of real estate at Brooklyn Park valued by the Valuer-General at $420,000, bank savings of $136,659, three term deposits totalling $156,532 and a share portfolio in 27 listed companies valued at 14 April 2012 in the sum of $368,640. 7 The grant of letters of administration of the estate of the deceased was made on 12 April 2012. The net estate of the deceased disclosed in the statement of assets and liabilities records a value of $2,305,440.09. The gross value of the estate in South Australia is $886,116.49. The South Australian estate largely consists of cash or term deposits in three banks, and shares in five listed Stanley J  SASC 139 2 companies. The estate outside South Australia consists of a term deposit of $6,675.34 and shares in listed companies both in Australia and overseas. The legislative scheme 8 The applicants seek an order under s 67 of the Act that they not be bound by s 65 of the Act, which section relates to the duty of the administrator of the estate to pay over money and deliver property belonging to a person who is not sui juris to the Public Trustee after a certain period of time. Section 65 provides: 65—Administrator to pay over money and deliver property to Public Trustee (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. 9 Section 67(1) provides a dispensing power and is relevantly in the following terms: 67—Judge may dispense wholly or partially with compliance with section 65  SASC 139 Stanley J 3 (1) 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. 10 As is apparent, s 67 provides that a judge may, being satisfied that it is “beneficial and expedient so to do”, order that an administrator not be bound by s 65. The applicants contend that an order should be made that they not be bound by s 65 of the Act, as the protection afforded by s 65 to a beneficiary who is not sui juris requiring an administrator to pay the funds to the Public Trustee, is not required in the circumstances of this matter. That application is not opposed by the Public Trustee. Before returning to address this contention and the merits of the application, it is appropriate to say something about the legislative scheme concerning the relevant provisions of the Act. 11 Section 65 seeks to protect a person where an administrator, not an executor, has been appointed by the Court to administer an estate 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 s 67 of the Act, Parliament conferred on the Court the power to relieve the administrator from the obligation under s 65 when it is “beneficial and expedient so to do”. 12 It is clear that s 65 has, at least in part, a beneficial and remedial purpose. It is settled that beneficial and remedial legislation is to be interpreted as widely as its terms permit. 13 In IW v City of Perth,1 Brennan CJ and McHugh J said in a joint judgment:2 [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) 14 Section 65 has been considered in two decisions of this Court in In the Estate of Freebairn3 and In the Estate of Richter (Deceased).4 1 (1997) 191 CLR 1. 2 (1997) 191 CLR 1 at 12. 3 (2005) 93 SASR 415. 4  SASC 124. Stanley J  SASC 139 4 15 In Freebairn5 and in Richter,6 the Court considered the meaning of the phrase “beneficial or expedient”. 16 In Freebairn, Besanko J concluded that the expression required a careful consideration of the facts of the particular case. The important consideration is the due and proper administration of the estate. That was in the context of an application pursuant to s 31(10) of the Act for an order dispensing with the requirement that an administrator provide a surety in accordance with the obligation under s 31(1) of the Act. 17 In Richter, Gray J, after analysing Freebairn, concluded that there are important differences between the use of the expression as it appears in different places in the Act. Accordingly, s 65 permitted the court to contemplate considerations other than the due administration of the estate. His Honour concluded that on an application pursuant to s 65 the key consideration is whether a beneficiary who is not sui juris is properly protected. This Court has subsequently followed the same approach in In the Estate of Raymond Charles Estall (Deceased).7 Consideration 18 Anthony is a retired cost estimator. He has been managing Vera’s financial affairs since January 2010. 19 Vera executed her own last will and testament on 17 November 1998 whereby she appointed the deceased as the sole executor of her estate, and in the event of him predeceasing her, she appointed Anthony and Warrick as executors. By her will she made pecuniary legacies to Anthony and Warrick, her daughters- in-law Elaine Ethel Lee and Julie Kay Lee, her grandchildren Craig Derrick Lee, Tracey Michelle Parkinson, Cassandra Lee and Sonja Lee, and her niece Amanda Louise Surman. The residue and balance of her estate was bequeathed to the deceased. In the event that her husband predeceased her, she made further pecuniary legacies to her grandchildren, daughters-in-law and niece, and left the residue and balance of her estate to be divided equally between Anthony and Warrick. 20 Since the death of the deceased, Vera has not remarried nor does she have a putative spouse, nor, by reason of her mental incapacity, is she able to execute a further will. 21 Craig Derrick Lee, Tracey Michelle Parkinson, Cassandra Lee, Sonja Lee, Elaine Ethel Lee and Amanda Louise Surman, have consented to the within application. 5 (2005) 93 SASR 415. 6  SASC 124. 7  SASC 188.  SASC 139 Stanley J 5 22 Since November 2011 Anthony has managed Vera’s medical affairs. Vera has resided at the Kirkholme residential aged care facility at Goodwood since November 2006. Anthony deals with regular correspondence from Kirkholme about day-to-day medical matters for his mother. He has been his mother’s nominee with the Department of Health and Ageing since January 2012. He is a signatory to her bank account and manages her savings account and term deposit accounts as well as her share portfolio. 23 Vera is 93 years of age. She receives an annual income from bank interest and share dividends of approximately $37,000. She does not receive the aged pension. She has no liabilities. Her expenses exceed her income. Last financial year the deficit was approximately $3,000. Those expenses primarily consist of daily fees for aged care at Kirkholme. Anthony proposes to meet the shortfall out of the deceased’s estate. Prior to his death, the deceased had been meeting the shortfall. 24 Anthony has a net income with his wife of about $25,000 per annum. They receive dividends from shareholdings and bank interest from savings. In addition, Anthony’s wife, Julie Lee, receives an annuity of $3,300 and a part aged pension. They generally draw $10,000 or $15,000 per annum from superannuation funds. They have sufficient income to meet their expenses. They have no liabilities. Their combined net assets are valued at $1,173,000 consisting of real estate at West Beach, bank savings, shares and a substantial balance in superannuation funds. 25 I am satisfied Anthony is financially secure. 26 All of the work undertaken by Anthony in managing Vera’s financial affairs has been done without charge or payment of a fee. 27 I am satisfied that if an order is made as sought by Anthony, Vera’s affairs will continue to be managed by him in a competent manner without additional cost to Vera. 28 On the other hand, if an order is not made and the property of the estate currently under administration is transferred to the Public Trustee for future management and administration, it will be subject to commission charged by the Public Trustee for the performance of this function together with a commission taken by the Public Trustee on the income received from the investment of funds comprising the estate. 29 Anthony indicates that he understands that, if an order is made as sought, he will be obliged to lodge an administration account with Public Trustee pursuant to s 56 of the Act. I am satisfied he will do so. 30 I note that the application is not opposed by the Public Trustee. Stanley J  SASC 139 6 31 In all these circumstances, I am satisfied that by making the orders sought, Vera, as the beneficiary of the deceased’s estate, will be properly protected. It will be beneficial to the interests of Vera and expedient that the funds due to Vera be joined with her funds, administered by Anthony pursuant to his appointment as Vera’s attorney. Conclusion 32 Accordingly, I made an order dispensing with the obligation on the part of Anthony to comply with the requirements of s 65 of the Act.
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