Probate and Administration in Western Australia

Requirements for sureties and guarantees

Sureties and guarantees may be required if an applicant for administration is resident outside of Western Australia.

The Non-Resident Executor

— 6 min read
Requirements for sureties and guarantees
Bail bonds and fine concept. Money and gavel as symbol of law.

Administration Act 1903, Section 26:
Power to Require Administrator to Produce Sureties

The provisions in question establish a framework within which a court may require guarantees from administrators of estates to safeguard the interests of persons concerned with the administration. Here's a breakdown and interpretation of the key elements from the relevant sections of the Administration Act 1903 and the Non-Contentious Probate Rules 1967:

(1) As a condition of granting administration to any person the Court may, subject to the following provisions of this section and subject to and in accordance with the rules, require one or more sureties to guarantee that they will make good, within any limit imposed by the Court on the total liability of the surety or sureties, any loss that any person interested in the administration of the estate of the deceased may suffer in consequence of a breach by the administrator of his duties as an administrator.

Subsection (1) introduces the court's authority to demand sureties as a condition for granting administration. This requirement aims to protect interested parties against losses due to the administrator's failure to fulfil their duties. The court may specify a limit on the total liability of the surety(ies).

(2) Where a guarantee is given as required by subsection (1) the Court may, at any time, upon the application of any person interested in the estate or of its own motion on the report of the Principal Registrar — (a) require the surety or sureties to give such further or additional guarantee as the Court may direct and, if that further or additional guarantee is not given by the surety or sureties and the administrator does not produce another surety or other sureties, as the case may require, to give that further or additional guarantee, the Court may remove the administrator and appoint another in his place with power to sue or be sued upon any contract made by the removed administrator; (b) order that the liability of a surety under the guarantee be reduced to such amount as the Court in the circumstances of the case thinks reasonable.

Subsection (2) outlines the court's ability to request further guarantees or adjust a surety's liability, which ensures flexibility in protecting the estate and interested parties based on evolving circumstances.

(3) For the purposes of this Act a further or additional guarantee given pursuant to subsection (2) (b) shall be deemed to be a guarantee given as required by subsection (1).

Subsection (3) clarifies that any additional guarantee is considered as if it were an original guarantee required under subsection (1).

A guarantee given as required by subsection (1) shall enure for the benefit of every person interested in the administration of the estate of the deceased as if contained in a deed to which the surety or sureties and every such person are parties and, where there are 2 or more sureties, as if they had bound themselves jointly and severally.

Subsection (4) details that guarantees benefit all interested parties and treats multiple sureties as having joint and several liabilities, enhancing the security provided to the estate.

(5) Where a guarantee is given as required by subsection (1) an action on that guarantee — (a) shall not be brought without the leave of either the Court or the Principal Registrar; (b) may be brought only on such terms and conditions as the Court or the Principal Registrar thinks fit.

Subsection (5) restricts actions on the guarantee to those with court or Principal Registrar approval, establishing oversight on legal actions related to the guarantee.

(6) If, upon the application of a surety who has given a guarantee as required by subsection (1), it appears to the Court that — (a) the estate is being wasted, or is in danger of being wasted; or (b) the surety is being in any way prejudiced, or is in danger of being prejudiced, by the act or default of the person administering the estate; or (c) any surety desires to be relieved from further liability, the Court may grant such relief as it thinks fit.

Subsection (6) allows a surety to seek relief from the court if the estate is at risk, they are prejudiced by the administrator's actions, or they wish to be discharged from further liability, providing a mechanism for sureties to address concerns.

(7) Subject to subsection (6), this section applies whenever administration is granted under any provision of this Act.

Subsection (7) affirms the section's application to all cases of granted administration under this Act, ensuring broad applicability.

(8) This section does not apply where administration is granted to the Public Trustee or in such other cases as may be prescribed by the rules.

Subsection (8) exempts certain administrations, such as those by the Public Trustee or as prescribed by rules, from these requirements, recognising situations where such guarantees may not be necessary.

The first of many references to my UK-residency and the threat of the Court requiring surety. Seems to be the tool in their arsenal.
The first of many references to my UK-residency and the threat of the Court requiring surety. Seems to be the tool in their arsenal.

Non-contentious Probate Rules 1963, Rule 27: Guarantee Where Administration Applied For

27. Guarantee where administration applied for (1) The Registrar shall not require a guarantee under section 26 of the Act as a condition of granting administration except where it is proposed to grant administration —
(a) for the use and benefit of another person or where the grant is otherwise limited;
(b) to an applicant who appears to the Registrar to be resident elsewhere than in Western Australia;
(c) where a beneficiary is not of full age or capacity; or
(d) where a beneficiary is not resident in Western Australia and has no agent or attorney there;
or except where the Registrar considers that there are special circumstances making it desirable to require a guarantee.

Subrule (1) specifies conditions under which a registrar is to require a guarantee pursuant to Section 26 of the Administration Act, focusing on cases where there's perceived increased risk due to factors like non-residence or limited grants.
Subrule (2) exempts certain applicants from the guarantee requirement unless special circumstances exist, acknowledging the lower risk or greater reliability associated with corporations authorised in Western Australia or legal practitioners.

(2) Notwithstanding that it is proposed to grant administration in any of the cases mentioned in paragraphs (a) to (d) inclusive of subrule (1), a guarantee shall not be required, except in special circumstances, where the applicant or one of the applicants is —
(a) a corporation authorised by the law of Western Australia to obtain a grant; or
(b) a person holding a current practice certificate under the Legal Practitioners Act 1893.

These sections collectively ensure that the administration of estates is conducted with a degree of financial security for the benefit of interested parties. The court's discretion in requiring sureties, adjusting their liabilities, and considering exemptions balances the need for protection with the practicalities of administering estates.

Under which circumstances will the court require sureties?

The explicit circumstances under which a court requires sureties, as outlined in the Administration Act 1903 and further specified in the Non-contentious Probate Rules 1963, include situations where:

Administration is granted for the use and benefit of another person or where the grant is otherwise limited. This typically occurs when the administrator is acting in a fiduciary capacity for beneficiaries who may not directly manage the estate, necessitating additional security to ensure proper administration.

The applicant for administration is resident outside of Western Australia. This requirement reflects the potential complications and increased risk of managing an estate from afar, including challenges in enforcing legal responsibilities and obligations.

A beneficiary is not of full age or lacks capacity. Minors or individuals unable to manage their affairs require special protection to ensure their interests are safeguarded throughout the administration process.

A beneficiary is not resident in Western Australia and does not have an agent or attorney in the state. Similar to non-resident administrators, non-resident beneficiaries present a risk that the court aims to mitigate through the requirement of sureties.

Special circumstances exist that, in the Registrar's judgment, make it desirable to require a guarantee. This provision allows for flexibility, enabling the court or registrar to demand sureties in situations that may not fit the other specified categories but where the risk to the estate or beneficiaries is perceived to be higher.

These conditions aim to protect the interests of the estate and its beneficiaries, especially in situations that pose a higher risk of mismanagement or loss. By requiring sureties, the court ensures that there is a financial guarantee in place to cover any losses that might occur due to the administrator's failure to fulfil their duties properly.

And what the explicit exclusions?

The explicit circumstances under which sureties are not required, as detailed in the Non-contentious Probate Rules 1963, are as follows:

When the applicant or one of the applicants is a corporation authorized by the law of Western Australia to obtain a grant. Corporations with legal authorization to administer estates in Western Australia are presumed to have the requisite professionalism and systems in place to manage estates properly, reducing the perceived risk to beneficiaries and the estate.

When the applicant holds a current practice certificate under the Legal Practitioners Act 1893. Legal practitioners with valid practice certificates are considered to have the knowledge, ethical obligations, and professional standards necessary to administer estates without the added security of sureties, barring special circumstances.

These exemptions are based on the assumption that certain entities and individuals possess inherent qualities or safeguards that minimize the risks associated with estate administration. However, it is important to note that even in these cases, the Registrar retains discretion to require a guarantee if there are "special circumstances" that make such a requirement desirable. This provision ensures flexibility and allows for protective measures to be applied based on the specific risks and nuances of each case.

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