FEDERAL COURT OF AUSTRALIA

Byers v Overton Investments Pty Ltd [2000] FCA 1761

SUCCESSION – testamentary succession to chose in action – where personal estate of deceased included a cause of action against respondent – where proceedings in respect of cause of action commenced by executor prior to grant of probate – whether proceedings a nullity – vesting of testate personal estate between death and grant of probate – whether vests in Official Trustee or executor – operation of ss 44 and 61 of the Wills, Probate and Administration Act 1898 (NSW) – whether the grant of probate the foundation of an executor’s title

31 Ed. III. St. I, c. 11 (Administration Upon Intestacy Act) 1357 (Imp)

21 Hen. VIII, c. 5 (Probate and Administration Act) 1529 (Imp)

Trade Practices Act 1974 (Cth)

Wills, Probate and Administration Act 1898 (NSW) ss 40, 44 & 61

54 Vic No. 25 (‘Probate Act’) 1890 (NSW) ss 15, 32 & 39

Administration and Probate Act 1929 (ACT) ss 38A & 39

26 Vic. No. 20 (Real Estate of Intestates Distribution Act) 1863 (NSW) (“Lang’s Act”) s 1

56 Vic. No. 30 (Probate Act of 1890 Amendment Act) 1893 (NSW) s 23

Administration and Probate Act 1969 (NT) ss 51 & 52

Public Trustee Act 1979 (NT) s 46

Public Trustee Act 1941 (WA) s 9

Murphy v Overton Investments Pty Ltd [2000] FCA 801 cited

Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57 referred to

Meyappa Chetty v Supramanian Chetty [1916] 1 AC 6-3 referred to

Ex parte Public Trustee; Re Birch (1951) 51 SR(NSW) 345 referred to

Daily Pty Ltd, The v White (1946) 63 WN(NSW) 262 referred to

Marshall v D G Sundin & Co Pty Ltd (1989) 16 NSWLR 463 followed

Darrington v Caldbeck (1990) 20 NSWLR 212 followed

Gertsch v Roberts (1995) 35 NSWLR 631 referred to

Holloway v Public Trustee (1959) 59 SR(NSW) 308 referred to

Bone v Commissioner of Stamp Duties (1974) 132 CLR 38 referred to

Ex Parte Yee Hing (1897) 13 WN(NSW) 208b discussed

Broughton, In Re (1902) 19 WN(NSW) 69 referred to

Sydney Municipal Council v Hayek (1930) 48 WN(NSW) 11 referred to

Foy v Public Trustee (1942) SR(NSW) 209 referred to

Greenway v McKay (1911) 12 CLR 310 referred to

Ex parte Callan; Re Smith [1968] 1 NSWR 443 referred to

Fred Long & Sons Ltd v Burgess [1950] 1 KB 155 cited

NSW Parliamentary Debates, Legislative Council, 1 December 1892, p. 2346

Williams, Law of Executors and Administrators, 10^th ed. 1904

Hastings & Weir, Probate Law and Practice, 2^nd ed. 1948

Halsbury’s Laws of England, 4^th ed. vol 17 para. 735

LOWANA BYERS v OVERTON INVESTMENTS PTY LIMITED

N 870 OF 1999

EMMETT J

6 DECEMBER 2000

SYDNEY

THE COURT ORDERS THAT:

1.         The application be dismissed.

2.         The applicant pay the respondent’s costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     I have before me an application by notice of motion filed on behalf of the respondent, Overton Investments Pty Limited (“Overton”).  By the notice of motion, Overton seeks summary dismissal of the proceeding on the ground that it is a nullity. 

2                     The proceeding was commenced by application filed on 30 August 1999.  In the application, the applicant was shown as “Estate of Desmond Scott”.  On 22 October 1999, a statement of claim was filed in the proceeding.  The applicant, as shown in the statement of claim, was “The Estate of Desmond Scott”.

3                     On 26 November 1999, I granted leave for an amended application and amended statement of claim to be filed.  Pursuant to that leave, an amended application and an amended statement of claim were filed on 3 December 1999.  In both, the applicant is described as “Lowana Byers”.  Paragraph 9 of the amended statement of claim alleges as follows:

“The applicant is the executor of the estate of Desmond Scott.”

4                     The proceeding arises out of the grant of a lease (“the Lease”) on 21 December 1987 by Overton to Desmond and Mary Scott for a term of 99 years.  The Lease related to a unit in the Heritage Retirement Village owned by Overton.  Allegations are made in the amended statement of claim, inter alia, that Desmond and Mary Scott were induced to enter into the Lease as a consequence of misleading and deceptive conduct on the part of Overton, in contravention of the Trade Practices Act 1974 (Cth).  Other causes of action are pleaded and various remedies are claimed in the amended application — see Murphy v Overton Investments Pty Limited [2000] FCA 801 for the background to the proceeding.

BACKGROUND

5                     Albert Henry Desmond Scott died on 23 November 1998 domiciled in New South Wales, having been predeceased by Mary Phyllis Scott.  By his will, Mr Scott, in the events that have happened, appointed Ms Byers as executrix of his will and gave the whole of his estate to her.  That estate would include any cause of action against Overton that was still extant at the date of his death.  Whether Mary Scott was jointly entitled to the cause of action has not been considered.  It appears to have been assumed that any entitlement in that regard passed to Desmond Scott on the death of Mary Scott.

6                     On 19 October 2000 the Supreme Court of New South Wales granted probate of Mr Scott’s will to Ms Byers.  Thus, both at the date of commencement of the proceeding and as at the date of the naming of Ms Byers as applicant, there had been no grant of probate in respect of the will of Mr Scott.  Overton contends, therefore, that the proceeding is a nullity and should be dismissed since, as at those dates, no cause of action was vested in Ms Byers.  Certain of the causes of action are now time barred.  Accordingly, it is critical to determine whether the proceeding was properly commenced.  That question turns on the position of Ms Byers as executrix of Mr Scott’s will prior to the grant of probate. 

LEGISLATIVE CONTEXT

7                     By the operation of s 61 of the Wills Probate and Administration Act 1898 (NSW) (“the WPA Act”) any personal estate of Mr Scott was “deemed to be vested in” the Public Trustee of New South Wales upon his death.  Notwithstanding the operation of s 61, by the operation of s 44 of the WPA Act upon the grant of probate, the estate of Mr Scott passed to and became vested in Ms Byers as the executrix “as from the death” of Mr Scott. 

8                     Section 61 relevantly provides as follows:

“From and after the decease of any person dying testate or intestate, and until probate, or administration, or an order to collect is granted in respect of the deceased person’s estate, the real and personal estate of such deceased person shall be deemed to be vested in the Public Trustee in the same manner and to the same extent as aforetime the personal estate and effects vested in the Ordinary in England.”

Thus, at the commencement of the proceeding and when the amendment was made to name Ms Byers as applicant, the estate of Mr Scott had, by virtue of the operation of s 61, become formally vested in the Public Trustee. 

9                     Section 44(1) provides as follows:

“Upon the grant of probate of the will or administration of the estate of any person dying after the passing of this Act, all real and personal estate which any such person dies seised or possessed of or entitled to in New South Wales, shall as from the death of such person pass to and become vested in the executor to whom probate has been granted or administrator for all the person’s estate and interest therein in the manner following, that is to say:

(a)        On testacy in the executor or administrator with the will annexed.

(b)        On intestacy in the administrator.

(c)        On partial intestacy in the executor or administrator with the will annexed.”

10                  The capacity and power of the Public Trustee in relation to an estate is by no means clear.  It may be that the Public Trustee has no active duties – see Andrews v Hogan (1952) 86 CLR 223 at 250; Holloway v Public Trustee (1959) 59 SR(NSW) 308.  However, the vesting of the estate in the Public Trustee is a positive act with some legal substance, which is equivalent to the English equivalent of vesting upon intestacy. There is no reason why, in a case of necessity, the Public Trustee should not have legal power to give directions about property.  If the Public Trustee cannot do so, no one can – Andrews v Hogan (above) at 234.  The Public Trustee is more than a mere formal repository of the legal estate until probate or administration has been granted.  The acts of the Public Trustee can bind the estate during the period in which the estate vests in the Public Trustee until probate – see Andrews v Hogan (above); Holloway v Public Trustee (above) at 311.

11                  On 19 October 2000, upon the grant of probate to Ms Byers, s 44 took effect and the estate of Mr Scott was then vested in Ms Byers, whose title related back to the time of death.  Although s 61 provides for the vesting of a deceased's property pending probate, it may be that it does not alter the rule under the general law that an executor derives his title from the will and that probate merely authenticates his title and is not the source of it – see Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57 at 77 (“Laybutt’s Case”).

THE GENERAL LAW POSITION

12                  Under the general law, the real estate of a deceased person did not vest in the legal personal representative.  A will operated as a conveyance by way of appointment and the real estate past immediately to the devisee or trustee.  In the case of intestacy, real estate passed directly to the heir at law. 

13                  Personal estate, however, was different.  Under the general law, the devolution of personal estate of a deceased person depended upon whether the deceased appointed an executor by a valid will.  An executor took his title to the personal estate from the will of his testator, not from the probate of the will.  The personal estate including all rights of action vested in the executor immediately on the death of the testator. 

14                  The consequence was that the executor could institute an action in the character of the executor before probate.  Nevertheless, an executor could not assert his title without production of probate as evidence of the title. The probate was operative as the authenticated evidence of the executor’s title, but not as the foundation of it — see, generally, Williams Law of Executors and Administrators 10^th ed. 1904 at pp. 213-214, 467; Meyappa Chetty v Supramanian Chetty [1916] 1 AC 603 at 608-9. 

15                  On the other hand, an administrator derived title to personal estate wholly from the grant of letters of administration.  No cause of action could accrue to an administrator until the grant of letters of administration.  The office of administrator is a statutory creation.  An administrator derived his powers from the appointment by an ecclesiastical tribunal. 

16                  In early times, when a person died intestate, the King as parens patriae, took the goods of the intestate and used them for the payment of his debts, of his burial expenses, and for the advancement of his wife and children, or if he had none, then for his blood relations. That prerogative was, at first, exercised by the King’s ministers of justice in ordinary court and even by certain lords of manors.  The functions of the Crown were later committed to the bishop of the diocese in which the goods of the intestate were found.  The bishop, acting in that capacity, was referred to as the Ordinary, who was described as:

“he that hath Ordinary jurisdiction in causes ecclesiastical, immediate to the King and his courts of common law, for the better execution of justice, as the Bishop or any other that hath exempt and immediate jurisdiction in causes ecclesiastical.”

Thus, the Ordinary was the ecclesiastical judge, normally the bishop, of the place where the death of an intestate occurred.  In that capacity, the Ordinary undertook the administration of the intestate estate.  That jurisdiction was additional to the jurisdiction of the Ordinary in relation to wills – see Hastings and Weir Probate Law and Practice 2^nd ed. 1948 at p. 16. 

17                  Prior to the reign of Edward I, the Ordinary had no right to sue for debts due to the intestate nor could he institute any legal proceedings to recover possession of goods not taken by him, nor was he under any liability to be sued by creditors of the deceased estate.  The effect of legislation in 1357 (31 Ed. III. St. I, c. 11 (Administration Upon Intestacy Act) (Imp)) was to take away from the Ordinary the duties of administering the intestate’s goods.  Instead, he was required to depute “the next and more lawful friends of the dead person intestate to administer his goods”.  Such deputy, when appointed, was to have the same right to demand and recover debts due to the estate of the deceased as an executor would have had. 

18                  Following 21 Hen. VIII c. 5 (Probate and Administration Act) 1529 (Imp) the Ordinary was bound to grant the administration of the goods of the deceased to the widow or to his next of kin, or to both.  From that time onwards, the Ordinary’s function seems to have been to grant probate or letters of administration and to supervise the accounts of executors and administrators but to take no part in the control or disposition of the goods of the intestate.  The administrator, when appointed, was entitled to sue for and recover any debts due to the deceased.  However, the Church had no right or interest of any kind in the property of deceased persons, beyond the right of jurisdiction, and of granting administration and the right of possession for that purpose – see generally Ex parte Public Trustee; Re Birch (1951) 51 SR(NSW) 345 at 347-8.

19                  Under the general law, Ms Byers would have had title to the relevant causes of action at the date of the commencement of this proceeding and at the date of the amendment, notwithstanding that she had no grant. Overton contends, however, that the position of an executor in New South Wales is different from the position under the general law and is no different from that of an administrator. 

20                  Section 44 has been described as a statutory enactment of “the doctrine of relation back” – see The Daily Pty Ltd v White (1946) 63 WN(NSW) 262 at 263 per Herron J (as his Honour then was).  Under the general law, that doctrine applied to acts of an administrator, since the property of an intestate did not vest in the administrator until the grant of administration.  The doctrine did not apply to an executor because the title of the executor was derived from the will. 

21                  Thus, ss 44 and 61, insofar as they apply in the case of intestate personal estate, do not appear to be inconsistent with the principles of the general law.  The Public Trustee stands in the same position as the Ordinary pending the grant of letters of administration.  Upon grant, intestate personal estate passes to the administrator “as from the date of death”. 

22                  However, in so far as ss 44 and 61 purport to apply the same principles to testate personal estate, the question arises as to whether or not their effect is different from the general law in relation to the position of an executor between the date of death and the grant of probate.  In The Daily Pty Ltd v White (above), Herron J considered that the effect of ss 44 and 61 was to place an executor in a different position from that in which the executor would be placed under the general law.  Thus, his Honour said (at page 263):

“By the combined effect of ss. 44 and 61 an executor in New South Wales is in the same position between the date of a testator’s death and the grant of probate as an administrator in England.”

Of course, until a grant of administration has been made, there is no administrator. On the other hand, there will be an identifiable executor before grant of probate. Herron J must be assumed to have been considering the position in relation to matters that occur after death of a deceased person but before grant.

the authorities

23                  The question presently before me was considered in the Supreme Court of New South Wales in Marshall v D G Sundin & Co Ltd (1989) 16 NSWLR 463 (“Marshall’s Case”).  At about 8.40 am on 3 June 1988, Mr Marshall died.  At some time after 9.30 am on the same day his solicitors, being unaware of his death, filed a statement of claim naming him as plaintiff and alleging negligence on the part of the defendants.  On 2 August 1988, the statement of claim was amended naming Mr Marshall’s widow as plaintiff “as executrix of the estate of Mr Marshall”.  However, probate was not granted to Mr Marshall’s widow until 23 September 1988. Yeldham J concluded that the proceeding commenced by Mr Marshall's widow was incompetent.  In Darrington v Caldbeck (1990) 20 NSWLR 212, Young J agreed with the conclusion reached by Yeldham J (at 219).  In Gertsch v Roberts (1995) 35 NSWLR 631, however, Powell J expressly refrained from expressing a view on the question (at  635). 

24                  In Marshall’s Case, Yeldham J considered that, if the situation in New South Wales concerning executors was the same as that obtaining in England and in Victoria and Queensland, then upon the later grant of probate, the action instituted by the widow after Mr Marshall’s death but before grant would have been validated, upon the making of the amendment to show her as the plaintiff.  The critical question was whether, in the light of the provisions of the WPA Act, the situation was the same in New South Wales as in England and in Victoria and Queensland (at 468).

25                  Yeldham J considered that s 44 “assimilates the situation of an administrator to that of an executor”.  That, with respect, puts the matter around the wrong way.  It may be that his Honour intended to restate the proposition that had been advanced by Herron J in The Daily Pty Ltd v White (above), namely, that the effect of ss 44 and 61 was to assimilate the situation of an executor to that of an administrator, after the date of grant.  If that is the effect of sections 44 and 61, then at the time of the commencement of the proceeding in this Court and at the time of the filing of the amended application and amended statement of claim, Ms Byers had no title to commence the proceeding.  On the other hand, if the position in New South Wales is the same as under the general law in relation to an executor the effect of the amendment on 3 December 1999 was to validate the proceeding. 

26                  A possible complication of the present proceeding is that the principal cause of action asserted arises under a federal enactment.  It has not been suggested before me that the personal estate in question, namely the chose in action comprising the cause of action under the Trade Practices Act 1974 (Cth), is located anywhere but New South Wales.  The argument has proceeded on the basis that Mr Scott was domiciled in New South Wales and that the administration of his personal estate is to proceed according to the law of New South Wales. 

LEGISLATIVE HISTORY

27                  The law relating to probate and letters of administration in New South Wales was consolidated and amended by 54 Vic No. 25 (‘Probate Act’) 1890 (NSW) (“the 1890 Act”).  The preamble to the 1890 Act provides as follows:

“Whereas it is expedient to consolidate and amend the law relating to Probate and Letters of Administration, and to the succession to Real Estate in cases of Intestacy, and to the collection, management, and administration of the estates of deceased persons.”

Thus, an object of the 1890 Act was to amend the law relating to intestate real estate. 

28                  The general law position in relation to intestate real estate had been altered in New South Wales by 26 Vic. No. 20 (Real Estate of Intestates Distribution Act) 1863 (NSW) (“Lang’s Act”).  By Lang’s Act, the real estate that would otherwise pass to the heir at law was to go to the legal personal representative of the deceased.  Section 1 of Lang’s Act provided as follows:

“From and after the passing of this Act all land which by the operation of the law relating to real property now in force would upon the death of the owner intestate in respect of such land pass to his heir-at-law shall instead thereof pass to and become vested in his personal representatives in like manner as is now the case with chattel real property.”

Chattel real estate vested in the Ordinary, as did all other personal estate, pending the grant of letters of administration.  Accordingly, following the enactment of Lang’s Act, intestate real estate would vest in the Ordinary until the grant of letters of administration and, upon grant, the real estate would vest in the administrator, as from the date of death, under the relation back doctrine. 

29                  The 1890 Act was intended to amend the law with respect to the devolution of testate real estate as well as intestate real estate.  Thus s 15 provided as follows:

“Upon the grant of probate of the will of any deceased person after the commencement of this Act, all the real estate, whether held by him beneficially or in trust, shall vest as from the death of such person in the executor to whom such probate shall be granted for all the estate therein of such person, and if there shall be more than one such executor, shall vest in them as joint tenants in the same way as personal estate now vests.”

30                  It appears that the words “after the commencement of this Act” in s 15 were intended to qualify “deceased” otherwise they would have had the effect of disturbing titles to real estate of a person who died prior to the commencement of the 1890 Act but of whose will probate had not been obtained until after its passing. 

31                  The effect of s 15 was that testate real estate was now to pass to the executor rather than directly to the devisee.  It would now be necessary for the executor to convey real estate to the devisee or trustees provided for in the will.  However, the new regime provided under s 15 did not say what was to become to the real estate during the period between death and grant of probate. 

32                  Section 32 of the 1890 Act dealt with intestate real estate and provided as follows:

“All real estate which any person shall hereafter die seised or possessed of or entitled to in the Colony of New South Wales intestate shall pass to and become vested in the administrator of the estate of such person as from the death of such person for his estate therein, or in the case of a partial intestacy to and in the executor named in the will, or to and in the administrator with the will annexed, and such administrator, or in the case of partial intestacy the executor or administrator with the will annexed, as the case may be, shall hold the said real estate upon trust for payment of the debts of the deceased, and subject thereto in trust for and as if the same had been devised to the same persons as tenants in common as would be entitled in the case of personal property, excepting only as mentioned in the next succeeding section.”

33                  Section 32 was evidently intended to take the place of Lang’s Act. It provided for vesting of real estate in an administrator where there was full intestacy or in the administrator where there was a grant of administration with the will annexed in the case of partial intestacy.  Those situations were dealt with under s 1 of Lang’s Act.  To that extent, s 32 simply replaced s 1 of Lang’s Act.  However, in following the scheme of Lang’s Act, no mention was made of the administrator with the will annexed where there was no partial intestacy.  No provision was made in the 1890 Act for such a situation.  In such a case, the real estate would not go to the administrator with the will annexed but direct to the devisees or trustees, as prior to enactment of the 1890 Act. 

34                  The possibility of a lacuna in title between the date of death and date of grant of representation was covered by s 39 of the 1890 Act.  Section 39 provided as follows:

“From and after the decease of any person dying intestate and until letters of administration or an order to collect shall be granted in respect of his estate the real and personal estate of such deceased person shall be deemed to be vested in the Chief Justice of New South Wales, or if there shall be no Chief Justice then in the senior Puisne Judge for the time being in the same manner and to the same extent as aforetime the personal estate and effects vested in the Ordinary in England.”

Section 39, however, applied only to intestacy and did not apply in the case of a will and the grant of probate. 

35                  Section 39 was derived from s 19 of 21 & 22 Vic. c. 95 (Court of Probate Act) 1858 (Imp), which provided as follows:

“From and after the Decease of any Person dying intestate, and until Letters of Administration shall be granted in respect of his Estate and Effects, the Personal Estate and Effects of such deceased Person shall be vested in the Judge of the Court of Probate for the Time being, in the same Manner and to the same Extent as heretofore they vested in the Ordinary.”

36                  The reforms of the 1890 Act were not well thought out and there were clearly anomalies in the scheme thereby established.  Nevertheless, it seems clear that, at that stage, there was no intention to change the law concerning devolution of testate personal estate.  Section 39 dealt with personal estate as well as real estate.  However, s 39 did not change the law as to testate devolution.  It simply provided an alternative depository of real and personal estate between the date of death and date of grant of letters of administration in the case of intestacy. That is to say, following the 1890 Act, the law in New South Wales continued to be the same as the law of England, in so far as a distinction was drawn between testate succession and intestate succession in relation to personal estate.

37                  Some of the anomalies resulting from the 1890 Act were addressed by 56 Vic. No. 30 (Probate Act of 1890 Amendment Act) 1893 (“the Amendment Act”).  Relevantly, s 23 provided as follows:

“From and after the decease of any person dying testate and until probate or letters of administration with the will annexed shall be granted in respect of his estate his real and personal estate shall vest as is provided by section thirty-nine of the Probate Act of 1890, in the case of persons dying intestate.”

Thus, s 23 appears to assimilate the vesting of all testate estate with the vesting of intestate estate.  In doing so, it purported to change the law as to the vesting of testate personal estate.

38                  It seems likely that s 23 was perceived to be necessary to deal with one of the anomalous consequences of s 15 of the 1890 Act.  The effect of s 15 was that, instead of the will operating as previously as a conveyance by way of appointment and real estate passing immediately to the devisee or trustee, it became necessary for the executor or executors to convey the legal estate to trustees, where they are not also executors, or to the person or persons beneficially entitled.  The question arose as to what became of the real estate during the period between the death of the testator and the grant of probate.  Did it vest in the devisee or trustee by common law title and become divested upon the grant of probate?  Section 23 was designed to answer that question. However, s 23 also applied to personal estate. 

39                  Some light might be thrown on the legislative intention by the debates on the bill for the Amendment Act.  On 1 December 1892, the Honourable R E Connor in the Legislative Council of New South Wales, moved for the inclusion of s 23 of the Amendment Act (referred to as clause 24 of the Bill) for the following reasons:

“The necessity for that is this: that at the present time when persons die intestate, the property vests in the Chief Justice under section 39 of the Probate Act.  That section states …

…………………………

Where there is no will the property vests, until the actual letters of administration are granted, in the Chief Justice.  In cases where there is a will there is no provision vesting the property.  It is hard to say in whom it vests now.  This is rather a technical matter, and the new clause has been found to be very necessary”.  (NSW Parliamentary Debates, Legislative Council, 1 December 1892, p. 2346)

40                  As indicated above, until the enactment of s 23, testate personal estate vested in the executor from the moment of the testator’s death.  Accordingly, even before proving the will, the executor could do almost all acts that affected the personal estate and were incidental to the office of executor.  The observation made by Mr O’Connor therefore appears to have been ill-informed.  Under the general law testate personal estate vested in the executor.  There was no need to provide a depository for testate personal estate pending the grant of probate.  There was no need to import the Ordinary (or Chief Justice or senior Puisne Judge) into a testate estate between death and grant of probate. 

41                  The consequence was that the inconvenience that existed in relation to the administration of an intestate estate between death and grant were imported into the administration of a testate estate.  Until the grant, an executor has no title and it is only upon grant that an executor has title to the personal estate, including a chose in action such as the causes of action in this proceeding.  The effect of s 23 was to assimilate the position of a testate estate pending the grant of probate to the position of an intestate estate.  Instead of the estate vesting in the executor upon death, by virtue of the will, the same hiatus was created, subject to the doctrine of relation back. 

42                  It was only by reason of the assimilation of the position of a testate estate to that of an intestate estate that it was necessary to import the doctrine of relation back into the position of an executor.  Section 15 of the 1890 Act appears to have applied the relation back doctrine in relation to real estate.  It applied the doctrine to intestate personal estate but did not, at that stage, apply the doctrine in relation to testate personal estate.  The law as to the devolution of personal estate was not being changed by the 1890 Act.  It is quite anomalous, therefore, that when s 23 of the Amending Act was enacted, it extended to personal estate as well as real estate. 

43                  However, at that stage, there was no equivalent of s 15 applying the doctrine of relation back to testate personal estate.  It was not until the enactment of the WPA Act in 1898 that the doctrine of relation back was applied expressly to testate personal estate.  When s 44 was enacted, it extended to personal estate as well as real estate in the case of grant of probate of the will or administration of the estate of any person dying after the passing of the Act.  When s 61 was enacted, it followed the language of section 39 of the 1890 Act.  The Public Trustee was substituted by amendment made in 1932.  

44                  The effect of s 23, on one view, was to make the grant of probate the foundation of an executor’s title in the same way as the grant of letters of administration has always been the foundation of the title of an administrator.  It would follow that an executor would be unable to act in any matters, however pressing, until the grant of probate. The question before me, therefore, is whether the effect of ss 44 and 61 was, as Herron J said, and Yeldham J probably intended to say, to assimilate the position of a testate estate in New South Wales to the position of an intestate estate.  The question turns on the effect of s 61 of the WPA Act. 

WHETHER THE DEEMED VESTING IS TO HAVE A LIMITED OPERATION

45                  Section 61 adopts the language of a legal fiction.  That is to say, s 61 does not provide that the property is to vest in the Public Trustee.  Rather, the personal estate (as well as the real estate) is deemed to be vested in the Public Trustee.  That use of language may indicate that the deeming is to have some limited operation only.  It raises a question as to the purposes for which the deeming is to operate. 

46                  In Marshall’s Case Yeldham J quoted a passage from the decision of Gibbs J in Laybutt’s Case (at 77-78) as follows:

“There is no doubt that at the time when the notice was given the estate of the deceased had by virtue of the operation of s 61 become formally vested in the Public Trustee, although it is not altogether clear what capacity and powers the Public Trustee had as a result: cf. Holloway v. Public Trustee [1959] SR(NSW) 308.  At the date of the hearing, however, probate had been granted and s 44 had taken effect: the estate of the deceased was then vested in the appellant whose title had related back to the time of death.  Moreover, although s 61 provides for the vesting of the deceased’s property pending probate, it does not alter the rule that an executor derives his title from the will and that the probate merely authenticates his title and is not the source of it.  At the time when the notice was given the appellant was therefore the executrix of the deceased’s estate and in that capacity was competent to receive the notice exercising the option; the fact that the property of the deceased was not then vested in her provides no reason why she could not do so.”

Oddly, having quoted that passage, Yeldham J made no later reference to it.  Yet, the passage contained the critical observation that:

“…although s 61 provides for the vesting of the deceased’s property pending probate, it does not alter the rule that an executor derives his title from the will and that the probate merely authenticates his title and is not the source of it.”

47                  Gibbs J held that a notice of exercise of option delivered to the executor of a deceased grantor was effective notwithstanding that it was delivered prior to the grant of probate.  Thus, Gibbs J appears to have accepted that the deemed vesting in the Public Trustee had only limited operation. 

48                  In Holloway v Public Trustee (above), Walsh J held (at 311) that the Public Trustee could not be said to have failed to pay the rent within the meaning of the Landlord and Tenant (Amendment( Act 1948 (NSW) because the Public Trustee had not duty to do so.  Walsh J could find no case in which it was asserted that the Public Trustee had any obligations or duties but that there were weighty observations in support of the opposite view.

49                  It is possibly arguable that the language of s 61 does not affect the vesting of personal estate in an executor upon the death of the testator for all purposes.  For some purposes at least, the estate is deemed to be vested in the Public Trustee, although upon the grant of probate, the estate passes to and becomes vested in the executor.  That language of s 44 therefore appears to assume that the vesting under s 61 was an actual vesting and not a fictional vesting.

50                  In Bone v Commissioner of Stamp Duties (1974) 132 CLR 38 (“Bone’s Case”), Mason J observed that the effect of ss 44 and 61 has been to place the title of the executor on a similar footing to that of the administrator at common law.  His Honour said that the executor’s title now flows from the grant of probate although upon the making of the grant the doctrine of relation back will apply (at 54).  That observation seems to be directly inconsistent with the observation made by Gibbs J in Laybutt’s Case.  In Bone’s Case, Stephen J concluded that, whatever might be the extent of the power of the Public Trustee, upon the death, the executor does not become a competent plaintiff to sue for the debts of the deceased.  It may be, indeed, that there is, for the time being, no competent plaintiff at all – see Bone’s Case at 46.  Bone’s Case was reversed by the Privy Council ((1976) 135 CLR 223).  However, that reversal does not affect the observations made by Stephen and Mason JJ.

51                  Section 23 of the Amendment Act was considered in Ex parte Yee Hing (1897) 13 WN (NSW) 208b.  In that case, the owner of a ship had died.  The owner’s executors made an application for an order under the Merchant Shipping Act 1894 (NSW) for an order that the ship be sold and the proceeds be paid to them.  Section 28 of the Merchant Shipping Act provided that such an order must be made within a year, at the most, of the occurrence of the event on which the transmission of the property in the ship to an unqualified person has taken place. The application was made on the day on which probate was granted, which was more than a year after the death of the owner. The Court held that, by virtue of s 23 of the Amendment Act, the estate of the deceased vested, from death until probate, in the Chief Justice, so that the event on which the transmission took place was the granting of probate and the application had been made within the relevant one year period.  Title of the executor to sue flowed from the granting of probate and not from the will.

52                  In New South Wales, it has been thought that, as a result of s 23 of the Amendment Act, in circumstances where probate had not been granted but orders were sought against an estate, it was necessary to join the Chief Justice to proceedings — see Re Broughton (1902) 19 WN(NSW) 69 and the Sydney Municipal Council  v Hayek (1930) 48 WN(NSW) 11.  On the other hand, because of the obvious conceptual difficulties created by the conflation of administrative and judicial functions, there was a reticence to grant such an order — see Foy v Public Trustee (1942) 42 SR(NSW) 209.

PRESERVATION OF A CAUSE OF ACTION

53                  Section 40 of the WPA provides :

“The Court shall have jurisdiction to grant probate of the will or administration of the estate of any deceased person leaving property, whether real or personal, in New South Wales.” 

The “Court” is defined in the WPA Act as the Supreme Court of New South Wales.  Jurisdiction under s 40 includes the power to appoint an administrator ad litem.  The appointment of an administrator ad litem is a type of grant of letters of administration. Such a grant can be made, inter alia, for the limited purpose of commencing or carrying ona proceeding.  An appointment will be appropriate where a matter is urgent and no personal representative has yet been appointed.  Normally a grant would be made to the person who is likely to get a general grant eventually — see Greenway v McKay (1911) 12 CLR 310.  Thus, whatever may be the true position of the Public Trustee, there is a mechanism available to preserve a cause of action that may be threatened with extinguishment by operation of a limitation period.  But for the Amendment Act, there would have been no necessity to rely on such a mechanism in the present case. 

CONCLUSION

54                  It is curious that the devolution of testate personal estate should have been altered in such a haphazard fashion.  It is likely that the Parliament did not consciously intend to import the inconvenience that existed in relation to an intestate personal estate between death and grant of letters of administrations to a testate personal estate where there was no difficulty.  It appears that the position in New South Wales is now different from that in England as well as most other states of the Commonwealth.  However, the position of an executor in New South Wales is not entirely anomalous in Australian law.  In each of Western Australia, the Australian Capital Territory and the Northern Territory, legislation provides for the vesting of a testator’s property, as from the date of death and until a grant of probate, in an authority such as the Public Trustee — see s 9 of the Public Trustee Act 1941 (WA); ss 38A and 39 of the Administration and Probate Act 1929 (ACT); ss 51 and 52 of the Administration and Probate Act 1969 (NT); and s 46 of the Public Trustee Act 1979 (NT). 

55                  The law in New South Wales was clearly changed by the Amending Act. The reason may not matter but, for whatever reason, the change was in fact made and the position of a testate estate, between death and grant, became the same as that of an intestate estate.  While I have reservations as to whether the Amending Act was intended to effect such a significant change, a fair reading of ss 44 and 61 of the WPA Act clearly leads to the conclusion that, until grant, an executor has no title.  Prior to grant, the cause of action that formed part of the personal estate of Mr Scott was vested in the Public Trustee.  Subject to the possibility of an administrator ad litem, the only legal persona who had title to commence a proceeding such as that presently before me was the Public Trustee.

56                  The doctrine of relation back, as the doctrine applies under s 44 of the WPA, does not have an unlimited or expansive operation but is confined and limited to the operation of that doctrine at common law: see Isaacs J in Ex parte Callan; Re Smith [1968] 1 NSWR 443 at 448.  The doctrine does not apply to disturb the interests of other persons or interests affected during the period, and cannot restore to the executor or administrator title to something which has ceased to exist in that interval: see Isaacs J in Ex parte Callan; Re Smith (above) at 448; see also Halsbury’s Laws of England 4^th ed vol. 17 para 735; Fred Long & Sons Ltd v Burgess [1950] 1 KB 155.

57                  Since the construction of sections 44 and 61 accepted by Yeldham J and Young J is clearly open, I am not prepared to conclude that their views of the provisions are clearly wrong.  Indeed, while I have some reservation, I am disposed to conclude, for the reasons outlined above, that the conclusion is correct.  It follows, therefore, that the contentions advanced on behalf of Overton must be upheld.

Associate:

Dated:              6 December 2000