Official Trustee in Bankruptcy v Robin Ann Jones & Anor [2003] NSWSC 343

New South Wales Supreme Court

CITATION : Official Trustee in Bankruptcy v Robin Ann Jones & Anor [2003] NSWSC 343 HEARING DATE(S) : 10/04/03 JUDGMENT DATE : 10 April 2003

JUDGMENT OF : Gzell J DECISION : Declaration that land ceased to be held as executor and was held beneficially prior to bankruptcy.

CATCHWORDS : SUCCESSION - Executors and Administrators - Title and estate of - Official Trustee in Bankruptcy as administrator of bankrupt executor's estate wishing to sell land - Whether land devised to executor held executorially or beneficially before executor declared bankrupt - Whether mechanisms in the Wills, Probate and Administration Act 1898, s 46E(1)(a) and s 83(1) and the Trustee Act 1925, s 11(1) permissive only - Whether mechanisms apply where executor and beneficiary are one and the same Wills, Probate and Administration Act 1898 LEGISLATION CITED : Trustee Act 1925 Administration and Probate Act 1915 (Vic) CASES CITED : Re Thorne and Sherson's Contract [1920] VLR 50 PARTIES : Official Trustee in Bankruptcy - Plaintiff Robin Ann Jones & Paul Joseph Maher - Defendants FILE NUMBER(S) : SC 1801/03 COUNSEL : Mr C Simpson - Plaintiff Mr D Ash - Defendants SOLICITORS : Freidman Reeves, Lawyers Reid & Reid, Solicitors

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

GZELL J

THURSDAY 10 APRIL 2003

1801/03 OFFICIAL TRUSTEE IN BANKRUPTCY v ROBIN ANN JONES & ANOR JUDGMENT (Ex tempore) 1 I have before me a summons for a declaration that, in events which have occurred, Leo Edmund Maley, deceased, as executor to whom probate of the will of his mother, Laura Ellen Maley, deceased, dated 25 February 1942, was granted by the Court on 3 October 1951, ceased to hold a property known as 58 National Park Street, Hamilton East, being the land comprised in Deed of Conveyance dated 17 September 1941 between David Francis Whyte and Very Whyte as vendors and Laura Ellen Maley as purchaser and registered no 593 book 1901, as such executor and held the land beneficially as the owner of the legal estate in fee simple prior to his becoming a bankrupt on 15 December 2000. 2 On 25 September 1951 Leo Maley swore an affidavit for lodgment with application for administration of his late mother's estate declaring the deceased had no debts. Thereafter, as I said, probate of the estate of his mother was granted to him. By her will, Laura Ellen Maley left her entire estate to her son, subject to payment of her debts. 3 Leo Maley died on 18 December 2000. The Public Trustee was granted Letters of Administration of his estate on 19 February 2002. On 14 November 2002 the Public Trustee entered into a contract with the defendants to sell the property to them. 4 As the will of the late Laura Ellen Maley contained no provisions expressly creating trusts, the property was vested in Leo Maley as personal representative of the deceased and he was obliged to deal with it in that capacity. Those obligations subsisted until he had performed his executorial duties. 5 The lapse of time between grant of probate in 1951 and declaration of bankruptcy in 2000 raises a presumption that estate debts had been paid or extinguished and those executorial duties came to an end before Leo Maley was declared bankrupt.

Section 46E(1)(a) of the Wills, Probate and Administration Act 1898 provides: "Real estate vested in an executor or administrator shall not be divested from the executor or administrator and vested in another person who may be entitled thereto either beneficially or as a trustee, or an executor or administrator, otherwise than by a registered conveyance, or by an acknowledgement operating under section 83, or by registration under the provisions of the Real Property Act 1900." 6 In my view, that provision has no application in the instant circumstances as there was no attempt by the bankrupt to divest himself of the property and vest it in another person. 7 Section 83(1) of the Wills, Probate and Administration Act 1898 is in the following terms: "When any real estate not under the provisions of the Real Property Act , 1900 is devised to any person by a will duly proved under the provisions of this Part of this Act, the executor of the will or the administrator with the will annexed may, as such executor or administrator, instead of executing a conveyance to such person, sign an acknowledgement in the form prescribed by the rules that the devisee is entitled to such real estate for the estate for which the same is devised for the devisee."

8 In my view, that provision is permissive and constitutes conclusive evidence of the vesting of the property in a devisee. It is inappropriate in the instant circumstances, in my view, where the executor and person entitled beneficially to the property are one and the same. 9 Section 11(1) of the Trustee Act 1925 is in the following terms: "If any property is vested in any person as executor of a will under which the person is the trustee of the property or is beneficially entitled thereto, such person may, at any time after all the executorial duties with respect to the property have been duly performed, declare by registered instrument in writing that he or she has ceased to hold the property as executor and that he or she holds the same as trustee or as beneficiary, as the case may be."

10 That provision is apposite to the circumstances of the deceased bankrupt. However, I am of the view that it, too, is permissive and would constitute conclusive evidence if its mechanism was called in aid by the deceased bankrupt. I do not regard it as necessary that its mechanism was called in aid in order that the basis upon which the deceased bankrupt held the property, ceased to be as personal representative and became one of beneficial holding. In my view, when his executorial duties were concluded, the deceased bankrupt held the legal estate in the property. 11 I am fortified in my conclusion by the judgment of Mann J in Re Thorne and Sherson's Contract [1920] VLR 50. His Honour had to consider similar circumstances to those before me in that the executrix and the devisee were one and the same person. At 54-55 his Honour posed the questions: "… is there anything in the common or statute law requiring that for purposes of conveyancing the two sources of title should be kept distinct after the grant of probate? If there is, what act of the executrix would have caused her to hold the legal estate as devisee?" His Honour continued:

"It has never been held, so far as I can find, that it is necessary for an executor-devisee to convey to a trustee to his (the executor's) own use, in order to rid himself of the character of an executor, or to enable him or his representatives to make a complete title under the will."

12 In the case before him, Mann J concluded that there was nothing in the Administration and Probate Act 1915 of Victoria to prevent the legal and equitable estates in the lots in question, united in the executrix from the grant of probate, passing upon her death to an administrator of her estate. 13 I make a declaration in terms of par 1 of the summons.

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