Bills

Administration and Probate (Removal of Requirement for Surety) Amendment Bill

Introduction and First Reading

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (15:26): Obtained leave and introduced a bill for an act to amend the Administration and Probate Act 1919. Read a first time.

Second Reading

The Hon. G.E. GAGO (Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy, Minister for the Status of Women, Minister for Business Services and Consumers) (15:27): I move:

That this bill be now read a second time.

This bill amends the Administration and Probate Act 1919 to implement the first set of reforms based upon the recommendations of the South Australian Law Reform Institute in the Final Report 2: Sureties' Guarantees for Letters of Administration.

This bill needs little explanation. It repeals sections 18 and 31 of the act, and amends sections 58, 66 and 67 of the act, removing from the act the requirements for, and references to, sureties' guarantees.

In 2011, the South Australian Law Reform Institute was asked to identify the areas of succession law that were most in need of review, to conduct a review of each of those areas and to recommend reforms. The institute's advisory board identified seven topics for review and established a succession law reference group. One of the topics was whether the South Australian statutory requirement for sureties' guarantees to be provided before some intestate estates can be administered should be retained or modified. This requirement has been criticised as obstructing the prompt administration of deceased estates.

An issues paper, released by the institute in 2013, explored the concerns about the requirement for sureties' guarantees. Submissions on the issues paper overwhelmingly supported the removal of this redundant requirement for sureties' guarantees because of the unnecessary cost and time involved, the difficulty in obtaining a surety, the fact there is only infrequent recourse to sureties, the degree of protection afforded, and the fact that they are required only when an administrator is appointed and not when there is an executor.

Laws requiring a form of security against maladministration in South Australia were first enacted in the Administration and Probate Act 1919, which required every applicant to provide an administration bond.

The act was amended in 1978, following a recommendation by the South Australian Law Reform Committee, and further amended in 2003 to replace the requirement for an administration bond with the requirement for a guarantee. The 2003 amendment also permitted the Supreme Court to dispense with the requirement for a surety guarantee where satisfied that it is 'beneficial or expedient to do so' and requires a further or additional guarantee or a reduction in the amount guaranteed. That has remained the current law.

In practice, the court in almost all cases takes advantage of the amendment and either dispenses with the requirement altogether or reduces the amount of the guarantee and sometimes appoints an additional administrator. There is no evidence that in South Australia anyone has suffered loss from an administrator acting wrongly or that anyone has enforced a surety's guarantee.

Although there are convincing arguments for doing more than simply removing the requirements for sureties' guarantees, the institute recommends that, in the interests of effective administration of deceased estates, this reform should not wait upon the preparation of other amendments for reform which are more complex and will need careful attention to detail. I commend the bill to members and seek leave to have the explanation of clauses inserted into Hansard without my reading it.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Administration and Probate Act 1919

4—Repeal of section 18

This clause repeals section 18 of the principal Act with the effect of removing the requirement for a surety to be provided before the sealing of administration under section 17.

5—Repeal of section 31

This clause repeals section 31 of the principal Act with the effect of removing the requirement for a person to whom administration is granted to provide a surety in certain circumstances.

6—Amendment of section 58—Proceedings to compel account

This clause deletes section 58(4) of the principal Act and is consequential on the repeal of sections 18 and 31.

7—Amendment of section 66—Effect of delivery etc to Public Trustee

This clause removes a reference to 'surety' and is consequential on the repeal of sections 18 and 31.

8—Amendment of section 67—Judge may dispense wholly or partially with compliance with section 65

This clause removes a reference to 'surety' and is consequential on the repeal of sections 18 and 31.

Debate adjourned on motion of Hon. G.A. Kandelaars.