The question of the Supreme Court’s requirements with regard to administration bonds and sureties has for some time been under consideration. That consideration has been directed to looking for ways of reducing the costs and difficulties caused to applicants by the requirement of bonds and sureties, while at the same time continuing to provide suitable protection for the interests of disable beneficiaries and in other appropriate cases. The Supreme Court Rules define a disable person as a minor or incompetent person.
Briefly, a bond is an undertaking on oath by an administrator to properly perform his or her obligations in the administration of an estate with the sureties guaranteeing to pay to the Crown the amount of the bond in the event of the estate not being duly administered. The requirement for an administration bond and sureties to that bond are set out in the Wills Probate & Administration Act and the Supreme Court Rules and apply in respect of applications for grants on intestacy, with will annexed and for reseal. Two sureties are required to the bond except where the bond is given by a guarantee company authorised by the Court. There is presently only one such company operating in this field. The Act also provides for a discretion to be exercised by the registrar to dispense with the bond, with one or more sureties or reduce the amount of the bond.
It is the current practice of the Court to require a bond to cover the share of any non-consenting beneficiary together with any unpaid unsecured debt. As a disable person is not able to give a consent, the bond is always required for their interest.
To facilitate the considerations previously mentioned, the practice currently in use will now be changed as follows:
Firstly, an adult beneficiary who is sui juris need only be served with notice of the intended application. If this is done the bond requirement will be dispensed with for their share. The notice should include a recital that the administration bond is to be dispensed with. Should the beneficiary wish to oppose the application it is up to them to do so in the usual manner.
Secondly, the current requirements for a bond with sureties will be retained in respect of the share of disable persons, with the following exceptions:
(i) where an incompetent person has a manager appointed, that manager may consent to the bond being dispensed with; and
(ii) where the proposed administrator is not the legal guardian of a minor beneficiary, that minor’s legal guardian may consent to the bond being dispensed with.
In this instance the consent must be in terms of prescribed form 101 suitably amended, and it must be stressed, that it is not intended in the case of a disable beneficiary, that the bond will be dispensed with upon mere service of notice (on the manager or legal guardian) as it would be in the case of an adult beneficiary who is sui juris. There must be a proper consent filed or the bond will be required as previously.
Thirdly, any requirement for a bond in respect of unpaid unsecured debts is dispensed with.
It is intended that at all times the registrar will retain his discretion to require a bond with sureties in any estate where it seems appropriate.
If there are any queries concerning this new practice they may be discussed by contacting the Probate Registry on 9228 7377 or by attending at the Registry at level 1, Old Supreme Court Building, King Street Sydney during office hours.
