Buhlmann v Nilsson [1921] HCA 38; (1921) 29 CLR 417 (16 September 1921)

HIGH COURT OF AUSTRALIA

Buhlmann and Another Defendants, Appellants; and Nilsson and Another Defendant and Plaintiff, Respondents.

H C of A

On appeal from the Supreme Court of South Australia.

16 September 1921

Knox C.J., Higgins and Starke JJ.

Browne, for the appellants.

Magarey, for the respondent Edward Ernest Carl Nilsson,

McLachlan, for the respondent Nitschke, was not heard.

Knox C.J.

This is an appeal from the decision of Poole J. on the construction of the will of Peter Nilsson, deceased. By that will the testator gave two allotments of land to his two daughters, one to each of them, subject in each case to the payment by the daughter of the sum of £600 to his trustee. It turned out that at the time of the testator's death these two parcels of land were subject to a mortgage of £1,200 to the Australian Mutual Provident Society, and the question raised by the originating summons was whether the two daughters were entitled to have that mortgage discharged out of the testator's residuary estate, or whether, on the other hand, the parcels of land devised to them were to bear the mortgage debt of £1,200 as well as the two charges of £600 imposed by the will.

The question turns upon the construction of sec. 52 of the Administration and Probate Act 1919, which, with certain verbal differences, enacted provisions similar to those contained in Locke King's Act. That section provides that "(1) When any person has died ... seised of or entitled to any estate or interest in any land or other hereditaments ... which are, at the time of his death, charged with the payment of money, by way of mortgage or other legal or equitable charge, ... and such person has not, by his will, ... signified any contrary or other intention, the person becoming beneficially entitled to such land or hereditaments through or under the deceased person shall not be entitled to have the money satisfied out of the personal estate, or any other real estate, of the deceased; but the land or hereditaments so charged shall, as between the different persons claiming through or under the deceased person, be primarily liable to the payment of all money with which the same is or are charged, every part thereof, according to its value, bearing a proportionate part of the money charged on the whole." Sub-sec. 2 provides, in slightly different terms from those of Locke King's Act, that the "contrary or other intention" must be "signified expressly and by distinct reference to the money charged."

Dr. Browne candidly admits that he cannot contend that on this will there is any expression of intention to exonerate this land within the meaning of sub-sec. 2, and his argument is based on the proposition that neither of the daughters, the donees of the two parcels of land, is a "person becoming beneficially entitled to such land ... through or under the deceased person." Dr. Browne contends that in order to come within those words it is necessary that the person of whom it is predicated that he becomes so beneficially entitled should get the whole estate which the testator had at the date of his death in the land in question, and that, inasmuch as each of the daughters only got her parcel of land subject to payment of £600, she did not get the whole estate which the testator had at the time of his death, and therefore was not a "person becoming beneficially entitled to such land ... through or under the deceased person." In my opinion that contention is untenable. In the first place, there is a distinction drawn in the section between "any estate or interest in any land or other hereditaments" and "such land or hereditaments." I am not sure that the provisions of the Real Property Act 1886 affect the matter, because apparently those provisions only apply to the meaning of "land" in that Act and in all instruments made or purporting to be made under it. However that may be, it appears to me that on the language of sec. 52 itself it is clear that a person taking land under the will of a testator, no matter whether he takes a less estate than, or the same estate as, or a less interest than, or the same interest as, the testator had in that land, is none the less a "person becoming beneficially entitled to such land ... through or under the deceased person." I think the matter may be decided by considering the position under this will apart from the Administration and Probate Act, which provided for the vesting of the estate of a deceased person in his executors. Dr. Browne very properly admitted that under the law apart from that Act each of these gifts of the testator would vest the legal estate in the daughter on the death of the testator. If that is so, I cannot see any escape from the position that she had become "beneficially entitled to such land ... through or under the deceased person."

Another contention was raised, that all these daughters obtained was an option of purchase and not the land. That matter depends entirely upon the construction of the words of the will. The cases cited in support of that contention were Given v. Massey[1] and In re Wilson; Wilson v. Wilson[2]. In both those cases there was a gift of the whole estate to trustees on trust to sell the real estate, and an option was given to named persons to purchase specified land; and in both those cases it was held that the donee was not a devisee of the land, but that what was given was a right to purchase the land at a fixed price. In the present case there is no gift of this land to any person but Dr. Browne's clients, the appellants. There is no trust for sale of this land. Those circumstances, I think, distinguish this case from those I have referred to. The words in which these gifts are expressed only show a gift of land charged with the payment of a sum of money, and in my opinion the appellants are persons "becoming beneficially entitled to such land ... through or under the deceased person"; and consequently the decision of the learned Judge was correct.

Higgins J.

The Administration and Probate Act, by sec. 52, prescribes a rule of construction which is to operate unless the contrary intention appears, and by sub-sec. 2 the contrary intention does not appear unless expressly signified and by distinct reference to the money charged. Primâ facie, all debts used to be payable out of the personal estate, and even if a testator had raised money for the purpose of improving his real estate the burden of the debt would fall upon the personal estate. That was thought to be unfair, and Locke King's Act interfered, prescribing that if a charge existed upon land at the death of the testator the land should bear it and the personalty should not. The South Australian Act goes even further than Locke King's Act, in particular by the concluding words of sub-sec. 2 of sec. 52. Whether those words are wise or not, it is not for us to consider. Counsel for the appellants does not rely on the words of the will as bringing the case under those concluding words. There is no reference in the will, express or otherwise, to any relation between the two sums of £600 and the mortgage. If those concluding words were not in the sub-section, there would be, to my mind, a strong argument—an argument which has not been mentioned on either side or in the judgment—in favour of the exoneration of these lands. For if one looks at the gifts to other beneficiaries it is seen that the testator gives to his son certain land "free of all encumbrances" and certain other land "subject to the payment by him of any mortgage that may be" upon it. It might well be said that where the testator wanted to charge the real estate he said so, and where he did not want to charge it he said so, and that the will was drawn in ignorance of this section. Moreover, if we were allowed to conjecture as to the real intention of the testator, there would be a very strong argument in favour of the appellants' contention; but we are not allowed to conjecture as to the real intention of the testator: we are bound by this Act. In the will there is no statement at all which shows that the two sums of £600 which were to be charged one upon each parcel of land had any relation to the sum of £1,200 which was secured by mortgage upon both parcels jointly; and certainly there is no "distinct reference to the money charged." Counsel for the appellants has admitted that the will cannot satisfy the concluding words of sec. 52 (2). But he says that the words in sec. 52 (1), "the person becoming beneficially entitled to such land or hereditaments through or under the deceased person," do not apply to any case where the person beneficially interested does not get precisely the same estate as the testator had. I can find nothing to suggest such a limitation of the meaning of sec. 52 (1). The Chief Justice has dealt with that point, and I do not intend to elaborate it further. As to the cases of Given v. Massey[3] and In re Wilson; Wilson v. Wilson[4], the Chief Justice has said that they do not apply. He relies on the trust for sale which existed in those cases, and the fact that there is no trust for sale in this case at all but a direct devise subject to a charge. I concur in his view that those cases do not apply. Whether they are a correct application of the law or not does not concern us at present.

I agree in the judgment that the appeal should be dismissed.

Starke J.

I agree that the appeal should be dismissed.

Appeal dismissed with costs.

Solicitors for the appellants, Symon, Browne & Symon.

Solicitors for the respondents, Isbister, Hayward, Magarey & Finlayson; McLachlan & Reed, for Spehr & Mackenzie, Mount Gambier.

[1] 31 L.R. Ir., 126.

[2] (1908) 1 Ch., 839.

[3] 31 L.R. Ir., 126.

[4] (1908) 1 Ch., 839.