Meynert v Leafdale Pty Ltd
[2005] WASC 102
FERNE PETA MEYNERT as Executrix of the Estate of GIUSEPPE & GIUSEPPINA PITTORINO -v- LEAFDALE PTY LTD as Trustee for PITTORINO FAMILY ARRANGEMENT TRUST & ANOR [2005] WASC 102
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASC 102 | |
| Case No: | CIV:1096/2005 | 5 MAY 2005 | |
| Coram: | MASTER NEWNES | 25/05/05 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | No caveatable interest shown | ||
| B | |||
| PDF Version |
| Parties: | FERNE PETA MEYNERT as Executrix of the Estate of GIUSEPPE & GIUSEPPINA PITTORINO LEAFDALE PTY LTD as Trustee for PITTORINO FAMILY ARRANGEMENT TRUST REGISTRAR OF TITLES |
Catchwords: | Real property Caveats Application to show cause why caveat should not be removed Whether residuary beneficiary under a will has caveatable interest in assets of estate before completion of administration |
Legislation: | Inheritance (Family and Dependants' Provision) Act 1972 (WA) Transfer of Land Act 1893 (WA), s 137, s 138, s 138A, s 142 |
Case References: | Bahr v Nicolay (No 2) (1988) 164 CLR 604 Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd (1974) 131 CLR 321 Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694 Connell v Bond Corporation Pty Ltd (1992) 8 WAR 352 Custom Credit Corporation v Ravi Nominees Pty Ltd (1992) 8 WAR 42 Kuper & Kuper v Keywest Constructions Pty Ltd & Anor (1990) 3 WAR 419 Attorney-General v Breckler (1999) 197 CLR 83 Barns v Barns (2003) 214 CLR 169 Bonini v WA Real Estate Custodian Ltd [2001] WASC 258 Eng Mee Yong v Letchumanan [1980] AC 331 Gisborne v Gisborne (1877) 2 App Cas 300 Livingston v Commissioner of Stamp Duties (Qld); Coulson (dec) (1960) 107 CLR 411 Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 Romano v Romano; Estate of Romano [2004] NSWSC 775 Stokes v Churchill; Estate of Frier, unreported; SCt of NSW (Santow J); 5189/90; 16 December 1993 Tankard v Midland Bank Executor and Trustee Company Limited [1942] Ch 69 Wendt v Orr [2004] WASC 28(S) Whale v Booth (1784) 4 Term Rep 625; 99 ER 755 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
LEAFDALE PTY LTD as Trustee for PITTORINO FAMILY ARRANGEMENT TRUST
First Defendant
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Real property - Caveats - Application to show cause why caveat should not be removed - Whether residuary beneficiary under a will has caveatable interest in assets of estate before completion of administration
(Page 2)
Legislation:
Inheritance (Family and Dependants' Provision) Act 1972 (WA)
Transfer of Land Act 1893 (WA), s 137, s 138, s 138A, s 142
Result:
No caveatable interest shown
Category: B
Representation:
Counsel:
Plaintiff : Mr L A Tsaknis
First Defendant : Ms C A Bahemia
Second Defendant : No appearance
Solicitors:
Plaintiff : Gibson Tovey & Associates
First Defendant : Carol Bahemia
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Bahr v Nicolay (No 2) (1988) 164 CLR 604
Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd (1974) 131 CLR 321
Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12
Connell v Bond Corporation Pty Ltd (1992) 8 WAR 352
Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Kuper & Kuper v Keywest Constructions Pty Ltd & Anor (1990) 3 WAR 419
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Case(s) also cited:
Attorney-General v Breckler (1999) 197 CLR 83
Barns v Barns (2003) 214 CLR 169
Bonini v WA Real Estate Custodian Ltd [2001] WASC 258
Eng Mee Yong v Letchumanan [1980] AC 331
Gisborne v Gisborne (1877) 2 App Cas 300
Livingston v Commissioner of Stamp Duties (Qld); Coulson (dec) (1960) 107 CLR 411
Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306
Romano v Romano; Estate of Romano [2004] NSWSC 775
Stokes v Churchill; Estate of Frier, unreported; SCt of NSW (Santow J); 5189/90; 16 December 1993
Tankard v Midland Bank Executor and Trustee Company Limited [1942] Ch 69
Wendt v Orr [2004] WASC 28(S)
Whale v Booth (1784) 4 Term Rep 625; 99 ER 755
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1 MASTER NEWNES: This is an application by the plaintiff under s 138 of the Transfer of Land Act 1893 (WA) for the first defendant to show cause why caveats lodged by the first defendant over three properties at Lancelin should not be removed from the Register.
2 The plaintiff is the executrix of the estate of Giuseppe Pittorino, who died on 2 June 1997 and probate of whose estate was granted to the plaintiff on 12 August 1998, and of the estate of Giuseppina Pittorino, who died on 16 December 1997 and probate of whose estate was granted to the plaintiff on 6 April 1999. The first defendant is the trustee of the Pittorino Family Arrangement Trust.
3 By his will Giuseppe Pittorino gave one half of his interest in a fishing boat, "Mascot" LFB284, to his son, Umberto Pittorino, and the remainder of his estate, after payment of all debts and testamentary expenses, to the trustee of the Pittorino Family Arrangement Trust (the "Trust") on trust for the Trust. Giuseppina Pittorino's will was in the same terms; that is, Mrs Pittorino left one-half of her interest in "Mascot" to Umberto Pittorino and the remainder of her estate to the trustee of the Pittorino Family Arrangement Trust on trust for the Trust.
4 The plaintiff says she last carried out a valuation of the assets of the estates in 2003. The major assets of the estates were, and are, their interests in a crayfishing business and crayfishing licences and managed fishing licences. The licences are currently held jointly in the names of Giuseppe Pittorino and the first defendant, as trustee of the Pittorino Family Arrangement Trust. The value in 2003 of the crayfishing business and the licences was $15,345,500, of which the estates are entitled to 50 per cent and the first defendant is entitled to the other 50 per cent.
5 The other significant assets of the estates comprise properties which were collectively valued in 2003 at $2,454,000. Four of those properties are in Fremantle and three are in Lancelin. The Lancelin properties consist of a residence at 15 Horton Way, and two industrial properties, at lots 8 and 17 Masters Way, Lancelin.
6 The administration of the estates is not yet complete. The estates currently have substantial debts, including a debt of some $500,000 owing to the Commonwealth Bank of Australia ("CBA"). The estates are currently in default under that loan and the CBA has appointed a firm of accountants, Pitcher Partners, as agents for the mortgagee in possession in respect of the rock lobster pot licences ("craypots") owned by the estate of Giuseppina Pittorino and the first defendant jointly. Pitcher Partners are
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- in the process of selling approximately 30 of the 421 craypots that are held jointly by the estate and the first defendant, to recover the amount of the CBA debt.
7 Ms Meynert says that once the CBA debt is repaid there will remain outstanding creditors of the estates in the total sum of some $347,000 and a contingent liability in the sum of $193,646 plus interest and legal costs, the contingent liability being the amount of a claim against the estates in the District Court by former employees of the crayfishing business. Ms Meynert says the estates are also incurring legal and accounting fees on a continuing basis.
8 It is unfortunately the case that litigation has rather engulfed the estates. There are currently five actions on foot involving the estates. Four of the actions have been brought by members of the Pittorino family. The fifth action is the action in the District Court by former employees of the fishing business who claim damages arising out of the termination of their employment.
9 One of the former actions is a claim under the Inheritance (Family and Dependants' Provision) Act 1972 (WA) (the "Act") brought by Elizabeth Pittorino, a daughter of the testator and testatrix. At the time that action was brought another daughter of the testator and testatrix, Vittoria, indicated an intention to bring such a claim. In the course of the proceedings brought by Elizabeth, a mediation conference occurred at which a settlement agreement was signed. By the terms of the settlement agreement Elizabeth and Vittoria respectively agreed to settle any claims they may have under the Act in consideration of certain property being provided to them. Among other things, the mediation agreement provides for the assignment of three of the Fremantle properties to Elizabeth and the other Fremantle property to Vittoria.
10 Elizabeth Pittorino has since brought proceedings to have the mediation agreement set aside on various grounds and those proceedings have not yet been resolved. The plaintiff, in her capacity as executrix of the estates, considers that pending the determination of the validity of the mediation agreement, the Fremantle properties cannot properly be regarded as assets of the estate available to be sold in the ordinary course of the administration of the estate.
11 The assets which remain available for sale in the course of the administration are therefore 50 per cent of the 421 craypots (less the
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- craypots sold by Pitcher Partners), 50 per cent of four managed fishery licences and the three Lancelin properties.
12 The plaintiff, who is a Certified Practising Accountant, has prepared a profit and loss summary for the estates. That shows that, after allowing for the repayment of the CBA debt, there will be an overall net cash shortfall to the estates in the 12 months to 31 August 2005 of $268,811. Ms Meynert said in evidence on this application that the likely shortfall has increased since the summary was prepared because of the loss of income from the craypots in the possession of Pitcher Partners. Ms Meynert suggested that now the likely shortfall was in the order of $400,000.
13 The plaintiff has obtained market appraisals of the Lancelin properties from three real estate agents. The agents all consider that the residence at 15 Horton Way would sell readily and have assessed the likely selling price in amounts ranging from $265,000 to $295,000. The agents consider that the two industrial properties would take longer to sell. The agents have variously assessed lot 8 as likely to sell in an amount ranging from $195,000 to $215,000 and lot 17 in an amount ranging from $240,000 to $250,000.
14 The plaintiff wishes to put the Lancelin properties on the market for sale with a view to selling two of them to meet the outstanding and ongoing debts of the estates, and thereby to facilitate the completion of the administrations.
15 The first defendant lodged caveats over each of the Lancelin properties in October 2004. In each case the first defendant claims an estate or interest in fee simple as the sole beneficiary of the wills of the registered proprietors, the testator and the testatrix. In the statutory declaration in support of each caveat Mr Pittorino, as sole director of the first defendant, has stated, in effect, that the first defendant is the sole beneficiary of the remainder of the estate of the testator and the testatrix respectively and that the first defendant does not consent to the sale of the Lancelin properties. Mr Pittorino says the first defendant has lodged the caveat "to prevent dealing with the land contrary to the [first defendant's] wishes".
16 In an affidavit filed in this application, Mr Umberto Pittorino says that the crayfishing business was started by his grandparents in about the 1920s and taken over by his parents in about the 1950s. It was always operated from Lancelin and Mr Pittorino says the three properties are used
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- to support the crayfishing business and are a vital part of it. The crayfishing season runs between 15 November and 30 June each year. Mr Pittorino says he currently lives at 15 Horton Way and will do so for the rest of the current season. He says that each of the industrial properties has a shed or sheds built on it, which are used to store fishing gear associated with the crayfishing business. He says that if the industrial properties were sold he would have to find alternative storage space for the fishing gear and inquiries he has made to date have not located any suitable properties. According to Mr Pittorino, if any of the Lancelin properties were sold it would have an adverse effect on the operation of the crayfishing business.
17 In his affidavit, Mr Pittorino says that the sale of between 12 and 14 craypots would raise sufficient funds to pay the estates' creditors and, as the sole director of the first defendant, which is the joint licence holder, he is prepared to sign on behalf of the first defendant any documents necessary to give effect to such a sale. In his affidavit Mr Pittorino also suggests that the sale of craypots is more appropriate because the number of craypots required to be sold to obtain the necessary funds can be determined relatively precisely, whereas at least two of the Lancelin properties would have to be sold in order to discharge the debts, but the sale of them would result in a significant surplus after payment of the estates' liabilities.
18 At the hearing of the application Ms Meynert was cross-examined on her affidavits filed in support of it. In her evidence Ms Meynert said that the craypots were expected to sell for approximately $30,000 each. Ms Meynert said that it was much more profitable to lease the craypots than to use them in a fishing business conducted on behalf of the estates. The Lancelin properties were not necessary to enable the business of the estates to be carried on. The properties generated no income but involved the estates in expenses for their maintenance and upkeep. The craypots, on the other hand, were necessary to maintain the income of the estates and no expense was involved in leasing the craypots. Ms Meynert said that the craypots were readily saleable but the price received for them fluctuated markedly. Currently the price for which craypots were selling was comparatively low.
19 It is against that background that I turn to the first issue on this application, namely whether the first defendant has a caveatable interest in the land.
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20 It was submitted on behalf of the plaintiff that the first defendant does not have such an interest. The fact that the first defendant is a beneficiary of the estates does not give it a proprietary interest in any of the specific assets of the estates while the administration of the estates remains incomplete. Pending completion of the administration, all the first defendant has is a right to have the estates duly administered. The first defendant therefore has no caveatable interest in the Lancelin properties.
21 It was further submitted that, as part of the process of administration, the plaintiff, as executrix, is entitled in the ordinary course of the administration to sell assets of the estates to meet the debts of the estate. There is nothing to suggest that the proposed sale of some of the Lancelin properties is other than in the normal and proper course of administration. It is beside the point that the first defendant would rather the plaintiff sold other assets of the estate for that purpose.
22 Counsel for the first defendant acknowledged that it had been held by the Privy Council in Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12, that where a beneficiary is entitled to participate in some unquantifiable share in a deceased's estate the beneficiary has the following interests of different characters:
(a) During the course of administration the entire ownership of the assets in the estate is vested in the personal representative and a beneficiary has a right is to compel the personal representative to administer the estate correctly.
(b) The right the beneficiary has to compel administration is a chose in action which is transmissible under the will of a beneficiary as personal property.
(c) On completion of administration, but before transfer to a beneficiary, the personal representative may hold the particular asset under a constructive trust for the beneficiary.
23 Counsel submitted that while it was necessary in the present case for the first defendant to establish an interest in the land, it was not necessary to establish a proprietary interest. Counsel referred to s 137 of the Transfer of Land Act which, so far as presently relevant, provides:
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- "Any beneficiary or other person claiming any estate or interest in land under the operation of this Act … by devolution in law or otherwise may lodge a caveat with the Registrar in an approved form."
24 Counsel also referred to s 138, s 138A and s 142 of the Act, where reference is made to "a caveat lodged by or on behalf of a beneficiary claiming under any will", and submitted that those provisions supported the proposition that any person who is a beneficiary claiming under a will is entitled to lodge a caveat against real property comprised in the estate of the deceased. Those provisions did not limit the entitlement to lodge a caveat to a beneficiary claiming under a will in respect of a fully administered estate. There was no reason to read into the words any requirement as to some specific interest the beneficiary must have in the assets of the estate, beyond their interest as a beneficiary claiming under a will.
25 It was therefore argued that the caveatable interest that arises by devolution of law under s 137 is any interest that a beneficiary may have in the estate of a deceased under a will. It is not necessary that such an interest be a proprietary interest. Counsel for the first defendant submitted there was nothing in s 137 which required that the estate or interest be of a proprietary nature. The interest the beneficiary has during the course of administration by way of a chose in action, is an estate or interest within the meaning of s 137.
26 Counsel for the first defendant relied on Kuper & Kuper v Keywest Constructions Pty Ltd & Anor (1990) 3 WAR 419 for the proposition that a chose in action may constitute a caveatable interest and it is not necessary to find a proprietary interest. In that case the defendant, Keywest, was the registered proprietor of certain land upon which it was constructing a block of home units. On 24 September 1998, Mr and Mrs Kuper entered into two contracts with Keywest for purchase of units 9 and 10 on the proposed strata plan. When the contracts were executed no strata plan had been registered and the Town Planning Board had not approved the strata plan. In a letter dated 24 November 1989, Keywest told the Kupers that the contracts had been terminated as a result of the Town Planning Board not having approved the strata plan by the date stipulated in the contract. On 29 November 1999 the Kupers lodged an absolute caveat over what was described as a "portion of lot 180". Subsequently, the strata plan was lodged at the Titles Office, containing 22 units, including the two units the subject of the agreement with the Kupers. Keywest sought to complete sales of other units but was
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- prevented from doing so because of the Kupers' absolute caveat. Subsequently the Kupers' caveat was withdrawn and new caveats were substituted, identifying units 9 and 10 on the registered plan. Keywest then brought proceedings for compensation under s 140 of the Transfer of Land Act, contending that the Kupers' original caveat had been lodged without reasonable cause.
27 Keywest succeeded at first instance, but that decision was reversed on appeal. Malcolm CJ (with whom Pidgeon and Seaman JJ agreed) held that the identity of the portion of land the subject of the caveat was directly related to the interest claimed and was sufficiently explicit. His Honour went on:
"The interests of a purchaser under a contract of sale is said to be commensurate with the availability of specific performance: Brown v Heffer (1967) 116 CLR 344 at 349, per Barwick CJ, McTiernan, Kitto and Owen JJ. As Mason and Deane JJ pointed out in Legione v Hateley (1983) CLR 406 at 446:
'A competing view – and one which has much to commend it – is that the purchaser's equitable interest under a contract of sale is commensurate not with her ability to obtain specific performance in the strict or primary sense, but with her ability to protect her interest under the contract by injunction or otherwise … '
For the purposes of Legione v Hateley their Honours were prepared to accept the correctness of the statement in Brown v Heffer. Gibbs CJ and Murphy J (at 298) were likewise content to follow Brown v Heffer. Brennan J left open the broader approach (at 312). In Stern v McArthur (1988) 165 CLR 489 at 522, Deane and Dawson JJ said:
'The extent of the purchaser's interest is to be measured by the protection which equity will afford to the purchaser.'
Their Honours made it clear that in their view this would include remedies other than specific performance, including an injunction. The equitable interest may be something less than equitable ownership, on the footing that it is only when the full purchase price has been paid that the vendor becomes a constructive trustee for the purchaser who is then the beneficial owner of the land: Chang v Registrar of Titles (1976) 137 CLR
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- 177 at 184-195. In the beginning the purchaser may be entitled to no more than an equitable lien over the subject land for the recovery of his deposit and any instalment of purchase price in the event that the contract goes off for want of title or is rescinded by reason of the vendor's default: Combe v Swaythling [1947] Ch 625; Whitbread & Co Ltd v Watt [1901] 1 Ch 911 at 915; [1902] 1 Ch 835; and see McDonald v Denys Lascelles Ltd (1933) 48 CLR 457 at 477-478, per Dixon J. The lien is an equitable interest in the land which arises by operation of law and entitles a purchaser to obtain an order for sale of the land to satisfy the lien: Rose v Watson (1864) 10 HL Cas 672. A purchaser's lien is sufficient to support a caveat: Ex parte Lord [1985] 2 Qd R 198. In the present case at the time when the caveat was lodged the lien would necessarily have been enforceable against the whole of the land comprised within the certificate of title."
28 Malcolm CJ then reviewed a number of the authorities, including Bahr v Nicolay (No 2) (1988) 164 CLR 604 and continued (at 432) as follows:
"In my opinion, in appropriate circumstances, a court will be prepared to protect a purchaser's interest under a contract such as that in the present case, at the so-called inchoate stage, both by granting specific performance in the sense of requiring the vendor to do all things necessary to be done to procure registration of the strata plan, as well as restraining the vendor by injunction from dealing with the land inconsistently with the purchaser's right to specific performance of the contract, both in the special sense and, subject to fulfilment of the condition, in the ordinary sense …
In my opinion the estate or interest claimed by the purchasers under the contracts was sufficient to ground a caveatable equitable interest in the relevant land, notwithstanding the conditional nature of the contracts."
29 Accordingly, at the time they lodged their caveat the Kupers had an interest in the land in respect of which equity would have given ordered specific performance in respect of the land itself. The relief would have comprised an injunction to restrain Keywest from dealing with the land other than in accordance with the contracts with the Kupers, and an order
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- that Keywest specifically perform its obligations under the contracts. It follows that that case does not assist the first defendant.
30 On the other hand, the decision of the Full Court in Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 is authority, binding on me, for the proposition that a caveator must have a proprietary interest in the land. In that case, Owen J (with whom Malcolm CJ and Walsh J agreed) said (at 50):
"By its very nature a caveatable interest must be a proprietary interest in the land. The purpose of the caveat is to restrain the registered proprietor from dealing with the land in a way which will defeat or derogate from the incidents attaching to that proprietary interest until the respective rights of the parties have been honoured (if there is agreement) or determined (if there is disagreement)."
31 Although that case did not concern a beneficiary claiming under a will, but rather a caveator claimed a charge over land to secure moneys advanced by the caveator, the principle there stated is of general application. I do not accept the first defendant's submission that a beneficiary under a will stands in a different position.
32 Accordingly, the question is whether the chose in action the first defendant has pending completion of the administration of the estates is a proprietary interest in the Lancelin land capable of supporting a caveat under s 137. In my view, it clearly is not.
33 In Commissioner of Stamp Duties (Qld) vLivingston [supra], Viscount Radcliffe, in delivering the opinion of the Privy Council, which affirmed the majority decision in the High Court, said (at 707) that, although an executor is subject to fiduciary obligations "and for certain purposes and in some aspects … treated by the court as a trustee", the law accorded a "peculiar status … to an executor for the purposes of carrying out his duties of administration". Generally speaking, " … whatever property came to the executor virtute officii came to him in full ownership, without distinction between legal and equitable interests. The whole property was his. He held it for the purpose for carrying out the functions and duties of administration, not for his own benefit …". While the executor was treated by the court as a trustee in some respects, essentially those trusts are to preserve the assets, to deal with them, and to apply them in the due course of administration. "What equity did not do
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- was to recognise or create for residuary legatees a beneficial interest in the assets in the executor's hands during the course of administration."
34 After referring to the " … fallacy … that for all purposes and at every moment of time the law requires the separate existence of two different kinds of estate or interest in property, the legal and the equitable", his Lordship continued (at 712):
" … When the whole right of property is in a person, as it is in an executor, there is no need to distinguish between the legal and equitable interest in that property, any more than there is for the property of a full beneficial owner. What matters is that the court will control the executor in the use of his rights over assets that come to him in that capacity; but it will do it by the enforcement of remedies which do not involve the admission or recognition of equitable rights of property in those assets. Equity in fact calls into existence and protects equitable rights and interests in property only where their recognition has been found to be required in order to give effect to its doctrines."
35 His Lordship said (at 713) that the proposition that beneficiaries in an unadministered or partially administered estate have any property right at all in any of the assets of the estate is contrary to the principles of equity.
36 It is, therefore, clearly established that the right of a beneficiary of an estate before the completion of administration is not a proprietary interest in any of the assets of the estate. That appears to result from what Lord Radcliffe described as the "peculiar status" of the executor. The fact that such a beneficiary has no proprietary interest is illustrated and emphasised by the distinction that has been drawn between such an interest and the interest of a partner in the assets of a partnership.
37 In Canny GabrielCastle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd (1974) 131 CLR 321, the High Court (at 328) accepted that there were similarities between a partner's interest in the assets of the partnership and that of a residual legatee in an unadministered estate, in that both have the right to insist upon due administration and their precise entitlement must await the due course of administration, but considered that the interest of a partner in a continuing partnership in a partnership asset was "sui generis" and constituted a beneficial interest and not a mere equity.
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38 In Connell v Bond Corporation Pty Ltd (1992) 8 WAR 352, the question was whether a partner had a caveatable interest in partnership land. It was contended by the defendants that a partnership interest is by nature an equitable chose in action represented by the entitlement of a partner to participate in a surplus on dissolution. As it was an equitable chose in action it did not confer any proprietary interest in partnership property capable of supporting a caveat. That proposition was rejected by Malcolm CJ, who concluded that a partner has a beneficial or equitable interest in the nature of a proprietary interest in each and every asset of a partnership. In that respect, his Honour (at 368) drew a distinction between the position of a partner and that of a residuary legatee in relation to an unadministered estate, as follows:
"If a partnership interest was no more than an equitable chose in action in the sense that it was a mere equity it is clear that it would not constitute an equitable interest in the land and would not support a caveat. A mere equity will not support a caveat: see Re CM Group Pty Ltd's Caveat [1986] 1 Qd R 381. This was the point of distinction between the position of a residuary legatee in relation to an unadministered estate and a partner in a continuing partnership referred to in [Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd [1974] 131 CLR 321] (at 328). Each had a right to a share in the surplus. The right of the residuary legatee was no more than a right to insist on due administration: Lord Sudeley v Attorney General [1897] AC 11; Guardian Trust and Executors Co of New Zealand Ltd v Hall [1938] 57 NZLR 1020; and Re Savage's Caveat [1956] 75 NZLR 118. It was a mere equity. As was made clear when Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694 went to the Privy Council, until the estate was administered the testator's property was vested in the executors and no beneficial interest in any item of property was vested in the residuary legatee until the residue was ascertained: Commissioner of Stamp Duties (Qld) v Livingston per Viscount Radcliffe (at 708). There was no trust fund until the residue was ascertained and there could be no beneficial interest until there was a trust fund. In the case of the partnership, while there is no trust fund as such there is a fund in the sense that at any point in time it is possible to determine the net worth of the partnership property after payment of all liabilities. Even if there is a deficiency, there is nonetheless a beneficial interest in
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- such assets as constitute the partnership property pending realization."
39 It follows, in my view, that the first defendant currently has no caveatable interest in the Lancelin properties. While the administration of the estates remains incomplete the first defendant's only right is to compel the due administration of the estates. Accordingly, in my view, the first defendant has failed to show cause why the caveats should not be removed.
40 I should add, as the matter was argued before me, that on the evidence there is no basis for a contention that the estates are not being properly administered or that the proposed sale of the Lancelin properties is not in the interests of the proper administration of the estates. It is no doubt the case that the first defendant would prefer that assets other than the Lancelin properties were sold. In particular, the first defendant would prefer that craypots were sold to discharge the debts of the estates rather than the Lancelin properties. That, however, is not to the point. What assets of the estates are to be sold in the course of the administration is a matter properly within the discretion of the executrix and there is nothing in the evidence before me to suggest that, in relation to the proposed sale of the Lancelin properties, the executrix has failed, or will fail, properly to exercise that discretion.
41 I will hear the parties on the form of orders and on costs.
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