Bird v Perpetual Executors & Trustees Association of Australia Ltd

Mary Ann Bird brought an action against Perpetual Executors & Trustees Association of Australia Ltd, as administrator of the estate of James Allen Parker, deceased. Bird sought to recover moneys allegedly covenanted to be paid by Parker under a deed executed by him. The deed acknowledged an indebtedness to Bird for board and residence at a specified weekly rate from March 1929 and directed Parker's trustees and executors to pay a sum calculated at that rate from March 1929 until his death, with interest. The High Court of Australia heard the appeal from the Supreme Court of Victoria.

The central legal issues before the High Court were whether the deed contained an express or implied covenant by Parker to pay the sums stipulated, and if not, whether the document was testamentary in nature and thus inoperative due to non-compliance with the Wills Act 1928 (Vict.). The court was required to determine the legal effect of the acknowledgment of indebtedness coupled with the direction for post-mortem payment.

By a majority (Starke, Dixon, and McTiernan JJ., with Latham C.J. and Williams J. dissenting), the High Court held that the deed did not contain an express covenant to pay, nor could such a covenant be implied. The majority reasoned that while an acknowledgment of debt in a deed under seal can ordinarily imply a covenant to pay, this implication arises only when the sole object of the deed is to create that acknowledgment. In this case, the acknowledgment was considered introductory to and explanatory of the subsequent direction to Parker's personal representatives. The presence of this direction, which was intended to operate only upon Parker's death, indicated that the deed had a further object beyond merely acknowledging a present debt. The majority concluded that the document was essentially a testamentary direction, not intended to create an immediate obligation on Parker himself, and therefore, not having been executed in accordance with the Wills Act, it was inoperative.

The appeal was dismissed.