Ann Eleanor Jeffery v John Alexander Irzykiewicz and Ross Edward Watch & Ors [2000] ACTSC 50 (16 June 2000)

Last Updated: 16 October 2000

Ann Eleanor Jeffery v John Alexander Irzykiewicz and Ross Edward Watch & Ors [2000] ACTSC 50 (16 June 2000)

CATCHWORDS

PRACTICE AND PROCEDURE - Commencement of proceedings -Proceedings commenced in name of executor before probate - Proceedings as a nullity.

Administration and Probate Act 1929, s.38A

Wills Probate and Administration Act 1898 (NSW), s.61

Probate and Administration Service (NSW) at 1301.1

Bone v Commissioner of Stamp Duties for New South Wales [1974] HCA 29; (1974) 132 CLR 38

Chetty v Chetty [1916] AC603

Darrington V Caldbeck (1990) 20 NSWLR 212

Marshall (as Executrix of the Estate of the Late Donald Raymond Marshall) v D G Sundin & Co Pty Ltd (1989) 16 NSWLR 463

National Mutual v Citibank (1995) 132 ALR 514

Holdsworth, A History of English Law, Vol III 570,

Plunckett, A Concise History of the Common Law, 729

No. SC 617 of 1996

Coram: Master T Connolly

Supreme Court of the ACT

Date: 16 June 2000

IN THE SUPREME COURT OF THE )

) No. SC 617 of 1996

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: ANN ELEANOR JEFFERY

Plaintiff

AND: JOHN ALEXANDER IRZYKIEWICZ

First Defendant

AND: ROSS EDWARD WATCH & ORS

Second Defendant

ORDER

Judge Making Order: Master T Connolly

Where Made: Canberra

Date of Order: 16 June 2000

THE COURT ORDERS THAT:

The following portions of the originating application dated 6 April 1999 and the further amended statement of claim be struck out:

i the endorsement to the effect that the plaintiff sues as Executor named in the last Will and Testament of Elizabeth Davidson Irzykiewicz, deceased, where occurring in the heading to the originating application and the further amended statement of claim.

ii paragraphs 23A, 23B, 23C and the particulars delivered therewith, 23E, 23G, and from the first two lines of paragraph 23F, the following words, "the said acts and omissions, the breaching of their said contractual duty, duty of care and fiduciary duty owed by them to the deceased and their.."

1. This is an application, by way of notice of motion dated 15 March 2000 by the second defendants to strike out certain paragraphs of the further amended statement of claim filed on 9 April 1999. The substantive action, commenced by originating application of 26 July 1996 concerns the estate of the late Elizabeth Davidson Irzykiewicz, mother of the plaintiff and first defendant. The deceased by will dated 5 August 1979 named the plaintiff and first defendant as joint executors and as joint beneficiaries to take in equal shares under the will. There are no other beneficiaries. The second defendants, a firm of solicitors, drafted the will on instructions from the deceased, and have undertaken further work on instructions from the deceased and the first defendant. In the years subsequent to the will the principal asset of the deceased, a residential property, was transferred to the first defendant, and certain bank accounts have been accessed pursuant, it is claimed, to a power of attorney prepared by the second defendants. The plaintiff seeks to challenge the actions of the first defendant, her brother, and the second defendants, the firm of solicitors.

2. In the original pleadings the plaintiff appears to bring the action in her personal capacity as a beneficiary. By an amended statement of claim dated 16 April 1998 the plaintiff identified herself as suing "in her personal capacity and also as Executor named in the Last Will and Testament of Elizabeth Davidson Irzykeiwicz Deceased". She pleaded certain breaches of duty of care alleged to have been owed by the second defendants to the deceased, and to the estate of the deceased. These allegations were further refined in the further amended statement of claim. By its defence to that pleading the defendants say in Para 23 of their defence of 10 May 1999 "In further answer to the whole of the further amended statement of claim , they :

(a) deny that the plaintiff is entitled to sue as Executor named in the Last Will and Testament of the Deceased."

3. The notice of motion presently before me seeks to strike out those parts of the further amended statement of claim where the plaintiff claims to be entitled to sue as executor named in the will. It also challenged certain pleadings as being embarrassing on the basis that the pleadings set up an allegation of a duty of care and a breach of a duty of care but did not, at all or with sufficient particularity to enable the defendants to plead to it, allege a loss arising from the alleged breach of duty. I upheld these aspects of the second defendants notice of motion and ordered that those passages be struck out, with leave to replead.

4. On the substantive question of whether a plaintiff may bring an action as a named executor, I reserved my decision.

5. The relevant source of power to strike out a pleading is found in Order 29 rule 4 which states:

"The Court may order any pleadings to be struck out, on the ground that it discloses no reasonable cause of action or answer, and in any such cause, or in case of the action or defence being shown by the pleadings to be frivolous or vexatious, the Court may order the action to be stayed or dismissed, or judgment to be entered accordingly, as is just."

6. The principles to be applied in exercising this power were restated by Lindgren J in National Mutual v Citibank (1995) 132 ALR 514 at 529 as follows :

1. A `reasonable cause of action" means one with some chance of success if regard be had only to the allegations in the pleadings relied upon by the claimant; in such a case, the claim cannot be struck out: Davey v Bentinck[1839] 1 QB 185

2. The mere fact that the case appears to be a weak one is not of itself sufficient to justify the striking out of the action: cf Wenlock v Moloney [1965] 1 WLR 1238

3. Normally, the power to strike out should be exercised only in plain and obvious cases, where no reasonable amendment could cure the alleged defect: cf Hodson v Pare [1899] 1 QB 455

4. It goes without saying that if a substantial case is involved in the claim, the power to strike out cannot be exercised.

5. Where a point of law has to be decided, and the judge is satisfied that this can be done by him appropriately, thereby avoiding the necessity of, and expense in going to trial, he is entitled to determine the point: cf Williams & Humbert v W&H Trade Marks [1986] AC 368.

7. Counsel for the second defendant submitted, in my view correctly, that this was a case where a clear and distinct point of law was being raised in the strike out application, and where resolution of that point of law favourable to the second defendant would substantially reduce the scope of the subsequent litigation, and that accordingly I should rule on the question of the plaintiff's ability to bring the action in the representative capacity on behalf of the estate. It seems to me that this is an appropriate case to decide the point of law, rather than to merely say that there is an arguable case, and leave the matter to the trial judge.

8. The plaintiff and the first defendant have both been named as executors in the will. Probate has not been granted, and the plaintiff has only recently given notice that she will apply for probate. The question arises as to whether, in these circumstances, an action can be commenced by a named executor. Counsel for the second defendant points to two decisions of the Supreme Court of New South Wales as authority for the proposition that a named executor has no right to bring an action on behalf of the estate until probate is granted, and that any action purporting to be brought is a nullity, and incapable of being cured by a subsequent grant of probate.

9. This is clearly the law in New South Wales by reason of the operation of s 61 of the Wills Probate and Administration Act 1898 (NSW) which provides:

"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 of England".

10. The effect of this section is that in the period between death and the grant of probate or administration, the estate is vested in the Public Trustee, and no other person has authority to bring an action in a representative capacity on behalf of that estate. This was held by Yeldham J in Marshall (as Executrix of the Estate of the Late Donald Raymond Marshall) v D G Sundin & Co Pty Ltd (1989) 16 NSWLR 463. In that case an action had been commenced in respect of an asbestos related disease, but unbeknown to the solicitors who filed the action, the plaintiff had died of the disease some hours before the action was commenced. The widow who was executrix of the deceased's estate then issued proceedings in her capacity as executrix. Probate was subsequently granted, but not until some time after the expiry of the relevant limitation period. The question before His Honour was whether the executrix could bring the action.

11. His Honour had regard to remarks of the High Court in Bone v Commissioner of Stamp Duties for New South Wales [1974] HCA 29; (1974) 132 CLR 38, which was subsequently reversed by the Privy Council [1976] HCA 14; (1976) 135 CLR 223 although on another point. He said:

"Stephen J observed (at 46) that under the succession law of New South Wales the testator's choses in action do not vest in his executor upon death; the executor does not, at the moment of death, become a person entitled to sue for debts due to the deceased, instead, by s 61 the real and personal estate of the deceased, whether testate or intestate, is, until grant of probate or administration, deemed to be vested, not in the executor named in the will, but in the Public Trustee."

12. His Honour concluded "not without some regret" that the plaintiff had no right to bring the action because, at the time the action was commenced, the title to the estate was vested in the Public Trustee.

13. This decision was followed by Young J in Darrington V Caldbeck (1990) 20 NSWLR 212. He there said at 219

"In my view I should follow Marshall v DG Sundin, not only because of principles of comity, but because, with respect, it appears undoubtedly correct. As Yeldham J pointed out in Marshall v D G Sundin (at 471), as long ago as 1954 in Bowler v John Mowlem & Co Pty Ltd [1954] 3 All E R 443 at 558, even Denning LJ , said that: "...if a plaintiff brings an action in a representative capacity as adminstratrix, then that action is a nullity if she was not at that date by law adminstratrix with a proper grant."

14. The principle is clearly stated in the commentary to s 61 in Mason and Handler on Wills Probate and Administration Service (NSW) at para 1301.1 as follows "the commencement of proceedings in a representative capacity without a grant is a nullity and cannot be cured by amendment or later grant" with the abovementioned cases cited as authority. It is apparent from the authorities that this proposition follows from the operation, on its terms, of the statutory provision, and it appears that, in the absence of that provision, the common law would allow an executor named to commence an action which would be validated on the grant of probate.

15. The provision which the second defendant says is the equivalent to s.61 in this jurisdiction is s.38A of the Administration and Probate Act 1929, which states :

16. "s.38A - Estate to vest in public trustee until grant:

17. Upon the death of a person, the real and personal property of the deceased person vests in the public trustee in the same manner, and to the same extent, as the personal estate and effects of a deceased person formerly vested in the Ordinary of England."

18.

19. Counsel for the second defendant argued that this provision is on its terms equivalent to s 61, in that it provides that, on death, the real and personal property (which would include the chose of action being the claim against the solicitors here advanced by the plaintiff) vests in the Public Trustee. Section 39 of the Act then provides that "upon the grant of representation of the estate" the property passes to and becomes vested in the executor to whom probate has been granted, or the administrator, in the case of intestacy, or a combination of the two. He argues that the operation of s 38A is relevantly the same as s61 in that it vests the property on death and until the grant of probate in the Public Trustee, and that accordingly any action purported to be commenced in a representative capacity by the plaintiff must be a nullity for the reasons laid down by Yeldham J in Marshall.

20. Counsel for the plaintiff took me to a line of authority culminating in Chetty v Chetty [1916] AC603 in support of the proposition that the common law has long recognised the right of an executor to commence an action on behalf of an estate. I have no doubt that this is so. The question is, however, whether s 38A of the Administration and Probate Act 1929 has the same effect as s 61 of the New South Wales legislation to, in effect, overrule this common law proposition by vesting all rights in the Public Trustee until probate is granted.

21. It was argued that s38A should be read down to apply only to intestate estates. There is indeed a difference in the wording between the New South Wales and Australian Capital Territory provisions, with the New South Wales provision applying "from and after the decease of any person dying testate or intestate" and the Australian Capital Territory provision applying "upon the death of a person". However, on its natural meaning, "upon the death of a person" would seem to apply to persons dying either testate or intestate. The words "dying testate or intestate" do not appear in the Australian Capital Territory text, but they seem unnecessary as by qualifying the operation of the section to "upon the death of a person' the provision in its ordinary meaning would apply to persons who die either testate or intestate.

22. It is true that historically the Ordinary of England, in ecclesiastical law a diocesan bishop exercising jurisdiction in ecclesiastical causes, had jurisdiction only in respect of the chattels in intestate estates (Holdsworth, A History of English Law, Vol III 570, Plunckett, A Concise History of the Common Law, 729). The origin of this law lays in the mists of medieval law and practice, where to die intestate was seen as somewhat disgraceful, as wills of personal property could be oral, and a person would usually make provision for the disposal of their personalty at the same time as their last confession. To die intestate thus suggested that the person had died unconfessed. As the soul of the deceased was thus in jeopardy, the bishop of the diocese was seen as the appropriate authority to deal with the matter- and perhaps in practice to make good the risk to the deceased's soul by appropriate donations to pious uses. (Hardingham, Neave and Ford, Wills and Intestacy in Australia and New Zealand, 2^nd Ed para 1402).

23. Counsel argued that, because the Ordinary's historical jurisdiction was so limited, the statutory provision should be read down to apply only to intestate estates. It seems to me that to read such a limitation into s 38A is to significantly vary the clear terms of the statute, which on its face applies to all deaths. Moreover, the section is found in Part 3 of the Act dealing with the grant of representation in cases of persons who die testate or intestate, and not in Part 3A of the Act which deals with special provisions in the case of intestacy. If s38A was intended to apply only to cases of intestacy, the legislature could have said so, or placed the provision in the appropriate part of the Act. That s 38A was deliberately placed in the general Part of the Act and intended to apply to all persons is further reinforced, in my view, by the next succeeding section, s 39, which provides that upon the grant of representation the real and personal estate "shall pass to and become vested in" the executor or the administrator, thus clearly referring to the case of persons who die testate or intestate. By providing in s 39 that the title passes and vests upon the grant of representation the section must assume that the title formerly vested elsewhere, which must refer to the previous section, which vested the property between death and grant of representation in the Public Trustee. To the extent that there was a common law doctrine that would vest title in the executor on death it is modified by s 39, which seems to me to form a coherent scheme for all estates with s 38A.

24. I am not persuaded that I should read into the clear words of s 38A a limitation that the section applies only to intestate estates. Accordingly, I am satisfied that the legal effect of the provision is, in relevant respects, identical to s 61 of the New South Wales Act and that, for the reasons set down by Yeldham J and Young J, the position in the Australian Capital Territory is that upon death the real and personal property of the deceased person vests in the Public Trustee until the grant of representation, and that accordingly a person named as an executor in a will has no right to pursue a chose of action of the estate until such grant. I am satisfied that the plaintiff's claim in so far as it purports to be on behalf of the estate, is thus a nullity.

25. I therefore make orders in accordance with paragraph 1 (a) of the Notice of Motion of 15 March 2000. I will hear the parties as to costs.

I certify that this and the twenty (20) preceding numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master, Mr T Connolly.

Associate:

26. Date: 16 June 2000

Counsel for the Plaintiff: Mr Hassall

Instructing Solicitors: Pamela Coward & Associates

Counsel for the First Defendant: Mr Constance

Instructing Solicitors: Snedden Hall & Gallop

Counsel for the Second Defendant: Mr Clyne

Instructing Solicitors: Minter Ellison

Dates of hearing: 6 June 2000

Date of judgment: 16 June 2000