Gellibrand v Murdoch - [1937] HCA 10

GELLIBRAND

MURDOCH AND OTHERS

RESPONDENTS.

PLAINTIFFS AND DEFENDANT,

ON APPEAL FROM THE SUPREME COURT OF Executors-Will-Construction-Administration of estate-Payment of debts-Land

Devise of undivided movely-Acquisition of further troo-tenths-Mortgage of seven- Acquisition of remaining interests in land-Direction to pay debts out of residuary Mar. 11, 12.

real and personal estate Contrary

intention "-Not an exoneration of the mortgaged land-Locke King's Act-Bank overdraft-Shares-Deposit General banker's lien-Realty equitably mortgaged to secure overdraft--Mortgaged land primarily liable-Administration and Probate Act 1935 (Tas.) (26 Geo. V. No. 38), sec. 35.*

At the date of his will in 1921 the testator was entitled to one undivided half share of certain land in fee simple. The testator divided his interest into fifth shares, that is, tenths of the entirety, and made specific devises of his * The Administration and Probate

bear a proportionate part of the charge Act 1935 (Tas.) sec. 35, provides (1)

on the whole thereof. (2) Such con- Where a person dies possessed of, or

trary or other intention shall not be entitled to, or under a general power of

deemed to be signified by-T. A general appointment by his will disposes of, an

direction for the payment of debts or interest in property which at the time

of all the debts of the testator out of of his death is charged with the payment

his personal estate, or his residuary of money, whether by way of mortgage,

real and personal estate, or his residu- equitable charge, or otherwise, includ-

ary real estate; or II. A charge of debts ing a lien for unpaid purchase money,

upon any such estate-unless such and the deceased has not, by will, deed,

intention is further signified by words or other document, signified a contrary

expressly or by necessary implication or other intention, the interest so

referring to all or some part of the charged shall, as between the different

charge. (3) Nothing in this section persons claiming through the deceased,

affects the right of a person entitled to be primarily liable for the payment of

the charge to obtain payment or satis- the charge and every part of the said

faction thereof either out of the other interest, according to its value, shall

assets of the deceased or otherwise."

58 CLR 237

whole interest. He then directed his residuary real estate and his personal estate to be sold and his debts &. to be paid out of the proceeds, and directed the balance to be held upon certain trusts. In 1925 the testator acquired another two-tenths interest in the land. He then mortgaged his seven-tenths interest and all other (if any) the part, share and interest of him the mort- gagor of and in the said lands." He later acquired the remaining three-tenths interest in the land, and at the time of his death he was the owner of the whole

Held that, under sec. 35 of the Administration and Probate Act 1935 (Tas.), the mortgage debt should be borne by the seven-tenths interest mortgaged,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Gellibrand v Murdoch

Details

AGLC: Gellibrand v Murdoch [1937] HCA 10
Case: [1937] HCA 10
Decision Date: 12 March 1937

CaseChat Overview and Summary

The case of *Gellibrand v Murdoch* concerned the administration of the estate of William Tice Gellibrand and involved a dispute over the apportionment of a mortgage debt and an overdraft. The primary parties were the beneficiaries of the estate, including specific devisees of land and beneficiaries of the residuary estate, and the executors of the will. The matter came before the High Court of Australia on appeal from the Supreme Court of Tasmania.

The central legal issues before the court were: first, how a mortgage debt secured over a portion of the testator's land should be borne as between the specific devisees of that land and the residuary estate, particularly in light of section 35 of the *Administration and Probate Act 1935* (Tas.) (which mirrors the English Locke King's Act provisions); and second, whether certain shares held by the testator's bank were subject to a banker's lien that could be used to satisfy the testator's overdraft, or if the overdraft should be borne solely by the land.

The High Court, in relation to the mortgage debt, held that the mortgage was only charged on the seven-tenths interest in the land that the testator owned at the time of the mortgage. The court found that the wording of the mortgage, including the phrase "and all other (if any) the part share and interest of him the mortgagor of and in the lands," did not extend to after-acquired interests in the land. Furthermore, the court determined that the testator's will did not signify a "contrary intention" within the meaning of section 35 of the *Administration and Probate Act 1935* (Tas.) to exonerate the mortgaged land. Consequently, the mortgage debt was to be borne proportionally by the seven-tenths interest, with five-sevenths falling on the specifically devised portions and two-sevenths on the two-tenths interest that formed part of the residuary estate. Regarding the overdraft, the court found that while the bank held the shares under a general banker's lien, these non-negotiable securities did not enable the bank to sell them as a pledgee might. Therefore, the shares were not primarily liable for the overdraft, and the equitable mortgage over the land was the primary security for the overdraft.

The High Court varied the order of the Supreme Court of Tasmania concerning the mortgage debt, declaring that the principal sum and interest should be borne five-sevenths by the specific devisees and two-sevenths by the residuary estate. The court affirmed the Supreme Court's decision regarding the shares and the banker's lien, finding that they were not primarily liable for the testator's overdraft.

Orders