Bills

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

Second Reading

Adjourned debate on second reading.

(Continued from 8 May 2014.)

The Hon. S.G. WADE (16:19): On Thursday 8 May, the Administration and Probate (Removal of Requirement for Surety) Amendment Bill 2014 was introduced in this place. The bill amends the Administration and Probate Act 1919 to implement the first set of reforms from the recommendations of the South Australian Law Reform Institute by removing from the act the requirement for and references to sureties guarantees. The law requiring a form of security against maladministration in South Australia was first enacted in 1919 to require every applicant to provide an administration bond. The act was amended in 2003 to remove the requirement for the administration bond with a requirement for a guarantee, and also to allow the Supreme Court to dispense with the requirement for a surety guarantee where it was satisfied that it was beneficial and expedient to do so, and require a further or additional guarantee or a reduction in the amount guaranteed.

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. One area of reform identified was South Australia's statutory requirement for sureties guarantees to be provided before some intestate estates can be administered and whether that should be retained or modified. Submissions on an issues paper released by the institute in 2013 overwhelmingly supported the removal of this redundant requirement, and the institute I think provides a helpful summary of the issues it saw with the current law in its final report.

I will provide a brief overview of those reasons by way of short quotes. One of the problems that the institute found was that it was not fair in the sense that there was no such remedy when the deceased leaves a valid will. The law has never required executors to provide surety guarantees or bonds. Another concern with the requirement for surety guarantee is the guarantee is made by private individual, usually a family member or friend of the family without cover by a bank or insurance company because financial institutions are no longer willing to shoulder the risk of default.

Thirdly, people who stand as sureties may not always understand that their guarantee will be strictly enforced whatever hardship that might cause them, and that they cannot recover the money paid out from the guarantee. Fourthly, there was criticism that the requirement is unnecessary because there is no evidence in South Australia that anyone has suffered loss from an administrator acting wrongly or that anyone has enforced a sureties guarantee.

Within the final report the institute recommended that in the interests of effective administration of deceased estates this reform should be implemented expeditiously and that it should not wait upon the preparation of other amendments for reform which are more complex and will need careful consideration. The opposition was advised by the government that the government intends to undertake consultation on the remaining recommendations of the report before progressing to legislation. I indicate that the opposition not only supports the bill before us but looks forward to further consideration of the recommendations of the institute's report, and I thank the institute for its work.

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) (16:23): I understand that there are no further second reading contributions to this bill. It is a fairly straightforward bill and other honourable members have indicated their support for it. I thank the opposition for its second reading contribution and its support for this bill. The bill is quite straightforward. It repeals certain sections of the act and amends some other sections of the act, removing from the act the requirement for, and reference to, securities guarantees.

The South Australian Law Reform Institute was asked to identify areas of succession law that needed review and reform. They identified a number of areas and this was one area. Basically they saw this requirement for surety guarantees to be provided before some interstate estates could be administered. They saw that as being obstructive. With those words, I recommend the bill to you and look forward to the committee stage.

Bill read a second time.

Committee Stage

Bill taken through committee without amendment.

Third 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) (16:26): I move:

That this bill be now read a third time.

Bill read a third time and passed.