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Legislative Council - Fifty-Fifth Parliament, First Session (55-1)
2023-02-23 Daily Xml
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Succession Bill

Second Reading

Adjourned debate on second reading.

(Continued from 20 October 2022.)

The Hon. J.M.A. LENSINK (16:07): I rise to make some remarks in relation to this bill. I thank the current Attorney-General particularly for acknowledging the work of the former Attorney-General in his second reading explanation, as the former Attorney-General had introduced a version of this bill to the parliament prior to parliament being prorogued.

This particular bill was introduced into this place on 20 October last year. It repeals the Administration and Probate Act 1919, the Wills Act 1936 and the Inheritance (Family Provision) Act 1972 and consolidates those acts into a single act. The bill updates and simplifies some of the language used in legislation. It also makes consequential and related amendments to the Aged and Infirm Persons' Property Act 1940, the Guardianship and Administration Act 1993, the Law of Property Act 1936, the Public Trustee Act 1995, the Supreme Court Act 1935 and the Trustee Act 1936. This bill adopts the contents of the 2021 bill subject to one change at section 115(3)(e) to delete the word 'natural' before the word 'parent'.

I understand the government has indicated the reason for this is that 'natural parent' would confine the scope of that provision to biological parents, whereas the intended application of the provision is to include a parent who is not a step-parent. This piece of legislation is the culmination of a large body of work that I understand commenced some time around 2011 when the South Australian Law Reform Institute identified areas of succession law that were most in need of review and recommended reforms.

SALRI, as it is known, is an organisation that many governments refer things to to ensure that we have a thorough understanding of existing provisions and how they may be improved through legislative reform. Over a period of eight years, SALRI conducted significant consultation and produced seven final reports: in 2013, 'Surety guarantees'; in 2016, two reports, 'Small deceased estates and minor succession law disputes' and 'Will register'; and in 2017, four reports, 'Who may inspect a will', 'Missing persons', 'Intestacy' and 'Family inheritance'.

Within these final reports were some 113 recommendations and one recommendation was adopted in 2014 by the former Labor government. Of the remaining 112 recommendations, the 2021 bill saw 104 of those recommendations adopted in whole or in part. That is a bit of a potted history of how this bill came to us today. Obviously, the Liberal Party supports the bill and looks forward to the committee stage of debate.

The Hon. T.T. NGO (16:11): I rise to speak in support of the Succession Bill 2022. Albeit a challenge to make this an exciting speech due to the complex and multilayered legislation it relates to, I will try my best to highlight some important new provisions that it provides.

This is a bill that began when Labor's former Attorney-General, the Hon John Rau MP, invited the South Australian Law Reform Institute (SALRI) to identify areas of succession law that were most in need of review and reform. As our current Attorney-General, the Hon. Kyam Maher MLC, acknowledged, the former Liberal government—in particular, the former Attorney-General the Hon. Vickie Chapman MP—introduced a version of this bill last year before parliament was prorogued.

For many South Australians, the death of a family member will be the first time they address this legislation so it is important that it is easily understood. Part 1 contains mostly preliminary provisions, including updated definitions. Part 2 of the bill only had a few recommendations for reform, so changes here focus on updating and simplifying the language used.

Part 3 of the bill contains provisions relating to the granting of administration or probate and includes a small number of amendments arising from the SALRI recommendations. In part 3 of the bill, the Supreme Court has the power to pass over applicants for a grant of probate or administration. This allows the court to appoint another person who they consider to be appropriate and to vary or revoke such a grant.

Another significant inclusion in part 3 of this bill are the provisions that introduce a deemed grant model to administer smaller estates of $100,000 or less. This means the Public Trustee will not have to apply for a formal grant of letters of administration and will instead have a deemed grant of administration. It will make the process for the administration of small estates by the Public Trustee much simpler, and it will reduce fees and costs for South Australians.

Part 4 of this bill deals with administration and probate. When we are confronted with a death, we become aware how important it is for our laws to support families dealing with the loss of a family member. Only recently, I was approached to help a constituent who told me that one of the executors of a family member's will was not carrying out their duty. Part 4 of this bill deals with executors and the process of administering deceased estates. This section contains a number of changes recommended by SALRI.

A significant change in this bill includes giving the courts additional powers to hold executors and administrators to account in relation to the administration of estates. The constituent I just referred to told me that the executor of their family member's will was refusing to act on administering the wishes of the deceased. The provisions here provide an important structure to ensure that the beneficiaries of estates can hold executors and administrators to account for failing to undertake their duties.

With the reforms outlined in this section, the court may order the executor or administrator to compensate persons who have suffered loss or give any other order that the court considers appropriate. As is the case of my constituent, this reform provides a pathway for families to resolve a problem with an executor who refuses to act on the wishes of the deceased.

Part 5 of the bill deals with situations where the deceased does not have a will, known as intestacy, and part 6 deals with claims for family provision. The reforms in part 6 do a better job at balancing the wishes of the deceased with the right of beneficiaries to make a claim if they believe they have not been properly provided for. It excludes former partners and spouses when financial matters have already been settled. This prevents long-term divorced spouses from making claims years after a marriage or partnership has ended.

This section also clarifies the position of adult stepchildren. With today's changing family structures, part 6 of this bill affects more families than it did in the past. Adult stepchildren have a way to make a claim on their step-parent's estate when their own parent leaves assets to a spouse rather than directly to their children. Part 7 of the bill provides a range of miscellaneous provisions, all of which better reflect the contemporary society we live in today.

The Succession Bill 2022 provides a much-needed and extensive review and reform, one we have not had since the Inheritance (Family Provision) Act in the seventies. The bill enacts the recommendations from seven SALRI reports that have been accepted by the government. It repeals the Administration and Probate Act, the Wills Act and the Inheritance (Family Provision) Act 1972 and consolidates the provisions from those acts into a single act. It also includes related amendments made to the Aged and Infirm Persons' Property Act, the Guardianship and Administration Act, the Law of Property Act, the Public Trustee Act, the Supreme Court Act and the Trustee Act.

What is important is that this bill reflects society today and uses simplified language. As I mentioned earlier, the provisions in this bill are detailed and extensive, and I have only touched on some of the important adjustments. It provides an updated use of language and reforms that better reflect the world today and will enable families to navigate through this legislation when having to deal with death.

Dealing with a death in the family can be a traumatic and daunting task in itself. Anything we can do to assist families in this process will reduce their anxiety and stress. So I commend this bill to the house.

The Hon. R.P. WORTLEY (16:20): I rise to speak in support of the Succession Bill 2022. This bill contains some of the most extensive reform to succession law in South Australia since the Inheritance (Family Provision) Act in the 1970s. Largely the same as last year's bill, it is updated to include some technical amendments filed by the previous government.

The bill is the result of the South Australian Law Reform Institute (SALRI) review kicked off by a previous Attorney-General, the Hon. John Rau, in 2011. The bill enacts recommendations from the seven resulting SALRI reports that are legislative in nature and that have been accepted by the government.

The bill repeals the Administration and Probate Act, the Wills Act and the Inheritance (Family Provision) Act 1972 and consolidates provisions from those acts into a single act. It also makes consequential and related amendments to the Aged and Infirm Persons' Property Act, the Guardianship and Administration Act, the Law of Property Act, the Public Trustee Act, the Supreme Court Act and the Trustee Act.

Many modernisations and updates were needed to the language and outdated references, including a reference to the reign of King Charles II in the definition of 'will'. There have also been updates to reflect modern society, such as that people would prefer inheritance to be kept in the family before going to the Crown and the inclusion of an additional degree of relative to the distribution in the case of intestacy, namely, the children of the first cousins of the intestate.

I will give an overview. Part 1 contains the preliminary provisions, such as the interpretation provisions. Part 2 contains provisions relating to wills. Part 3 deals with the administration and probate, part 4 administration of deceased estates, part 5 intestacy, part 6 claims for family provisions, followed by miscellaneous provisions in part 7.

I turn to the substantive parts. Part 1—Preliminary, deals with commencement and interpretation (i.e. definitions). In the definitions section some of the definitions have been modernised or simplified where possible. For example, the definition of 'will' has been modernised and is based on the definitions used in interstate legislation. The commencement provisions in part 1 disapply the automatic two-year commencement provisions of the Acts Interpretation Act to ensure that a longer time period is available prior to commencement of the bill, if required.

Part 2 now contains the provisions that formerly made up the Wills Act. There were very few recommendations from SALRI that dealt with the provisions of the Wills Act. Therefore, the changes in this part of the bill are focused on modernising and simplifying the language, where that has been possible.

One of SALRI's recommendations that does come within this part of the bill is a new provision that gives certain classes of person the right to inspect a will of a deceased person. The class of persons includes persons named in the will, beneficiaries, surviving spouses and domestic partners or former spouses and domestic partners, parents or guardians of the deceased and persons eligible to a share of the estate under the rules of intestacy had the person died intestate.

Persons with claims against the estate in law or equity can also inspect the will, but only with the permission of the Supreme Court, if they have a proper interest in the matter and if it is appropriate for them to do so.

Part 3—Probate and Administration. This part of the bill incorporates a small number of recommendations from the SALRI report. It has been clarified that a grant of probate or administration can only be granted to a person aged 18 years and over, and also that a grant may be made to more than one person. The Supreme Court has also been given the power to pass over applicants for a grant of probate or administration to appoint another person who they consider to be appropriate, and to vary or revoke a grant (recommendation 4 in the SALRI report titled 'Sureties Guarantees for Letters of Administration').

The other significant inclusion in part 3 of the bill are the provisions introducing the deemed grant model for the administration of small estates. This was a SALRI recommendation from the report titled 'The Administration of Small Deceased Estates'. These provisions allow the Public Trustee to give notice to the Registrar of Probates that they intend to administer a small estate (of the value of $100,000 or less) under the deemed grant provisions.

The Public Trustee will not have to apply for a formal grant of letters of administration and will instead be taken to have a deemed grant of administration. This will make the process for the administration of small estates by the Public Trustee simpler and less costly, which is important for small estates.

Following the consultation process, the design of the deemed grant model has been adjusted from the model originally suggested by SALRI. Changes to the model include not requiring the Public Trustee to file a notice with the court but rather to publish a notice in the Government Gazette declaring that it would administer the estate under the deemed grant provisions. The notice is then required to be published on the Public Trustee's website. The grant will be taken to have been granted 14 days after the gazettal of the notice.

Further, the court has been given the power to revoke a deemed grant on application by the Public Trustee or a person interested in the estate. The maximum estate value, initially set at $100,000, is able to be increased by the minister by notice in the Gazette. This will allow the value to keep up with the effects of inflation over the longer term but will not require the amount to be updated every year.

Part 4—Administration of deceased estates. Part 4 of the bill deals with the administration of deceased estates and contains a number of changes recommended in the SALRI reports. Some of the significant inclusions in part 4 are provisions which allow the court to require an executor or administrator to give an undertaking to the court related to how the estate is to be administered, or in relation to other related matters.

The court has also been given a wide range of powers to remedy loss if an executor or administrator fails to perform their duties. The court may order the executor or administrator to pay into the estate an amount equivalent to the financial benefit obtained by the executor or administrator as a result of their failure, and order for the executor or administrator to compensate persons who have suffered loss, or any other order the court considers to be appropriate.

The ability of the court to impose these types of orders is important, as the criminal offences related to the duties of executors and administrators have been removed from the legislation as a result of another SALRI recommendation. At the suggestion of the South Australian Bar Association (SABA), a limitation period of three years has been set to make an application for a remedy under section 98, starting from when a person aggrieved by the failure became aware of the failure.

Provisions have also been included upon the recommendation of SALRI to allow persons who hold money or personal property for a deceased person (up to the value of $15,000) to pay the money or transfer the property directly to a surviving spouse or domestic partner of the deceased or a child of the deceased without need of a grant of probate or letters of administration. This is intended to allow, for example, banks to transfer the money in a bank account belonging to the deceased to the person's spouse in a much faster time frame than if the grant of probate is required.

One other addition to the bill not included in the SALRI recommendations is the inclusion of a provision to codify the application of assets in the payment of debts and liabilities in solvent estates. There were existing provisions dealing with insolvent estates but South Australia relied on the common law for solvent estates. Reliance on the common law has meant that the rules are more complex to apply in South Australia, and a clear codified formula will be beneficial for executors and administrators to follow when dealing with deceased estates. Therefore, a provision has been included at section 83 that is based on the provisions used in the Victorian legislation.

A further change has been made in relation to the payment of interest on pecuniary legacies. SALRI recommended a different interest rate be used to the current 180-day bank bill swap rate, as that interest rate is not really published anywhere that is accessible to members of the public. The provision has been amended to allow the interest rate to be prescribed.

Part 5—Intestacy. The provisions that deal with intestacy—that is, where a deceased has died without a valid will—have been the subject of a number recommendations from SALRI. However, it should be noted that a majority of the recommendations preserve the status quo. The amount of the preferential legacy a surviving spouse is entitled to under the rules of intestacy has been increased by $20,000 to $120,000.

One of the other main changes is that the distribution of intestacy has had one additional degree of relatives—the grandchildren of relatives of the fourth degree, being the children of the first cousins of the intestate—included in the distribution order before the estate passes on to the Crown. This change has been undertaken as there was a strong preference expressed to SALRI during the public consultation that people would prefer their estate to pass to a more distant relative, if there is one, rather than go to the Crown. Distribution is on a per capita basis in equal shares to children and grandchildren of the intestate, but on a per stirpes (inheriting the share of the relevant parent) basis in all other cases.

It has also been clarified that a spouse or domestic partner of an intestate has no entitlement to any part of an intestate's estate if they are a party to a prescribed agreement or order. The intention of these changes is to provide that spouses or domestic partners who have separated but not legally ended their relationship through divorce or been removed from the relationship register and finalised the financial matters between them, are removed from the order of inheritance for intestate estates.

The agreements and orders that are to be prescribed are likely to be binding financial agreements and orders relating to the distribution of property under the Family Law Act 1975, which is a commonwealth act, and agreements under the Domestic Partners Property Act 1996, which is a South Australian act. The specific types of agreements will be prescribed by regulation to give flexibility in the event that the legislation providing for these types of agreements or orders undergoes amendments.

Part 6—Family provision. The feedback collated by SALRI during the preparation of the report 'Review of the Inheritance (Family Provision Act) 1972' was generally supportive of the notion that claims under the family provision act are too easy to make and not enough weight is placed on the wishes of the testator. Therefore, the categories of claimant who are automatically entitled to bring a claim under the family provision act have been adjusted.

Former spouses and domestic partners are excluded from making a claim for family provision if they have been a party to a prescribed agreement or order similar to section 107. The specific agreements and orders will be prescribed but, again, as outlined above, are intended to include binding financial agreements and orders relating to the distribution of property under the Family Law Act 1975, a commonwealth act, and the agreement under the Domestic Partners Property Act 1996, which is a South Australian Act.

This provision is intended to prevent a former spouse or domestic partner who has effectively ended their relationship and settled all financial matters between themselves and the testator to come back and make a family provision claim after the testator is deceased, perhaps even a number of years after the end of their relationship.

Adult stepchildren have to demonstrate that either they are disabled and significantly vulnerable by reason of their disability, or they were genuinely dependent on the deceased at the time of their death, or they cared for or contributed to the maintenance of the deceased immediately before their death, or they significantly contributed to the estate of the deceased, or assets accumulated by the stepchild's parents substantially contributed to the estate of the deceased person.

Additionally, stepchildren who are minors are also entitled to make a claim if they satisfy the court that they were wholly or partly, or were legally entitled to be wholly or partly, maintained by the deceased immediately before their death. Grandchildren of the deceased person will now have to satisfy the court that either their parents died before the deceased person or that the grandchild was wholly or partly, or was legally entitled to be wholly or partly, maintained by the deceased before they will be able to make a claim.

Section 116 now provides that, when determining whether to make a family provision order, the court's primary consideration is to be the wishes of the deceased person. The court may also order a party to the proceedings to give security for costs that may be awarded against the party if it appears to the court that the party's claim for family provision may be without merit, or the party is not willing to negotiate a settlement of a claim for provision. This is aimed at discouraging unmeritorious claims.

One change from the original drafting instruction in part 6 is that the provision requiring a person to seek permission from a court before making a family provision claim has been removed. This was a recommendation from SALRI. However, feedback from the Chief Justice, the Law Society of South Australia and SABA all indicated that it would not be helpful in preventing unmeritorious claims and would likely only result in increased legal costs and extending the length of proceedings.

Part 7—Miscellaneous. Part 7 of the bill contains the miscellaneous provisions. One significant addition in this part is a provision that will codify the rules governing the situation where there are simultaneous deaths of spouses or domestic partners. Currently, South Australia relies on common law rules in this situation, which means that the rules in South Australia are different from other Australian jurisdictions. The new provision states that where there are simultaneous deaths any jointly-owned property will devolve in equal share to each person's estate as if they were tenants in common.

An additional provision in part 7 has been included to codify the presumption of survivorship. This provision provides that, where two or more persons have died in circumstances where it is not possible to determine the order of death, the deaths will, for all purposes affecting title to property, be taken to have occurred in order of seniority, with the eldest having died first. Other provisions in part 7 include provisions dealing with how copies of wills are to be obtained, provisions dealing with admitting wills into evidence, provisions dealing with the exercise of rights of retainer, and provisions allowing for court rules and regulations to be made.

Schedule 2—Related amendments. Schedule 2 contains the related amendments to other acts. One significant inclusion in the schedules are the amendments to the Guardianship and Administration Act. SALRI recommended that provisions be made to allow for the limited administration of the estate of a missing person. The provisions are located in the Guardianship and Administration Act, as they do not deal with the estate of a deceased person but a person who is missing.

The administrator may apply to the court for an administration order which allows the administrator to deal with the estate in order to pay the person's debts for the maintenance of dependents of the person and the care and maintenance of the property of the person. If the administrator becomes aware that the missing person is alive or is deceased, they must advise the court as soon as practical.

This is a very important bill. There are a lot of issues out there in the community in regard to estates and the way they are handled. I seek the support and approval of the council to this bill.

Debate adjourned on motion of Hon. D.G.E. Hood.

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