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This matter is the first to consider the construction of the set-off arrangement in s 39C(4) of the Succession Act 1981 that is applicable when the spouse of a deceased who has died intestate seeks to acquire their “shared home” through payment of the “transfer value” of the deceased’s interest, pursuant to Pt 3 Div 3 of the Succession Act 1981. Justice Martin held that, properly construed, s 39C(4) may be used to set-off money which is able to be distributed to the spouse from the estate against the transfer value – the set-off arrangement did not require the money to have actually been distributed.
20 November 2020
Where a person dies intestate, Pt 3 Div 3 of the Succession Act 1981 permits the deceased’s spouse to acquire their “shared home” upon payment of the “transfer value” of the deceased’s interest in the property. . Section 39C(4) provides the following set-off arrangement:
“At the resident’s option, money that may at the time of transfer be distributed to the resident from the deceased’s estate (whether under a will or on intestacy) may be set off to reduce the amount of the transfer value.” .
The deceased in this matter died intestate in November 2019. . The estate included a home that the deceased and his de facto spouse, Ms Vu, owned as tenants in common, valued at $310,000. . Under the Succession Act 1981, Ms Vu was entitled to a “statutory legacy” of $150,000. –. It was accepted that Ms Vu was permitted to have the deceased’s half-share of the shared home transferred to her upon her paying the transfer value of approximately $156,000. –. However, Ms Vu lacked the funds to pay the transfer value and sought to take advantage of the set-off arrangement in s 39C(4); otherwise, she would not be able to pay the transfer value. The interpretative issue before the Court was whether s 39C(4) permitted Ms Vu to set-off the amount to which she was entitled to from the estate against the transfer value. .
Justice Martin held that Ms Vu could take advantage of s 39C(4). A strict construction of s 39C(4) that precluded her from setting-off the statutory legacy due to her would result in the “nonsense” of her only being able to generate funds necessary to pay the transfer value if she sold the house. . His Honour considered that s 14B(1) of the Acts Interpretation Act 1954 permitted the Court to have regard to the Queensland Law Reform Commission Report that s 39C(4) arose from, together with the Explanatory Notes for the Bill introducing the provision, in order to avoid an absurd or unreasonable interpretation. –.
It followed that the phrase “‘money that may at the time of the transfer be distributed to the resident” in s 39C(4):
“should not be construed as being confined to money or cash that is in the hands of the resident. The word ‘may’ should be construed in its permissive sense, that is, it identifies money which is able to be distributed to the resident at the relevant time but need not be distributed if it is used as a set off against the amount of the transfer value.” 
This construction was also “further informed by the word ‘money’” which in this context was to be given a broad meaning. .
In the result, the administrator was directed that he was justified in transmitting the shared home to Ms Vu and setting off the transfer value against her entitlement to the estate, with costs of the application to be paid from the estate on an indemnity basis. –.