National Trustees Executors and Agency Co of Australasia Ltd v Dwyer

The parties to this appeal were the National Trustees Executors and Agency Company of Australasia Ltd. and James Edward Hogan (the executors) and a number of residuary beneficiaries of the estate of Winifred Dunn (the beneficiaries). The dispute concerned the executors' alleged failure to recover the balance of purchase money due under a contract for the sale of land, which formed part of the deceased's residuary estate. The beneficiaries brought an action in the Supreme Court of Victoria, alleging breaches of duty by the executors. The High Court of Australia heard an appeal from the decision of the Supreme Court.

The legal issues before the High Court included whether the executors had breached their duty by failing to obtain the balance of purchase money on its due date and by granting extensions of time to the purchaser. The court was also required to determine whether the executors were protected by section 15 of the Trustee Act 1928 (Vic.) or section 61 of the Trustee Act 1928 (Vic.), and whether the beneficiaries' claim was barred by any relevant statute of limitations, particularly section 82 of the Supreme Court Act 1928 (Vic.) and section 304 of the Property Law Act 1928 (Vic.).

A majority of the High Court (Starke, Dixon, and McTiernan JJ.) held that, apart from section 15 of the Trustee Act 1928, the executors had not breached their duty. This was due to the adverse economic conditions and the nature of the remedies available to them, which made any attempt to enforce the contract likely to have severe consequences. Furthermore, the court found that the executors had actively exercised their discretion in good faith under section 15 of the Trustee Act 1928, which relieved them from liability for any loss arising from granting time for payment. Latham C.J., dissenting on this point, considered the action to be founded on a devastavit and held that it was barred by the six-year limitation period under section 82 of the Supreme Court Act 1928, as six years had elapsed between the alleged devastavit and the commencement of the action.

The High Court allowed the appeal, varying the decision of the Supreme Court. The majority found that the executors had not committed a breach of duty, or alternatively, were protected by statutory provisions and the exercise of their discretion. Latham C.J. found the action barred by the statute of limitations.