Simmons v Ross

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY & PROBATE LIST

S CI 2017 03921

IN THE MATTER of section 15 of the Administration and Probate Act 1958

AND

IN THE MATTER of rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015

BETWEEN:

PETER SIMMONS	Plaintiff
v
JACQUELYN ANNE ROSS (as named executor of the estate of KIMLARN ELIZABETH SIMMONS) & ORS (according to the attached schedule)	Defendants

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	17 May 2018
DATE OF JUDGMENT:	8 June 2018
CASE MAY BE CITED AS:	Simmons v Ross & Ors
MEDIUM NEUTRAL CITATION:	[2018] VSC 306

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PRACTICE AND PROCEDURE – Application for summary judgment on the basis that causes of action are statute barred – Whether plaintiff’s claim has no real prospect of success having regard to whether the relevant limitation provision bars the claims – Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514.

LIMITATION OF ACTIONS – Administration action – Application by beneficiary of the will of the deceased pursuant to s 15 of the Administration and Probate Act 1958 (Vic) that an executrix named in the will prove the will or renounce – Alternatively the plaintiff be appointed administrator with will annexed – Plaintiff claims entitlement to personal property in the estate of the deceased (shares in a private company) – Whether executrix assented to a vesting in the plaintiff of the shares more than 15 years before commencement of proceeding – Whether claim to the personal property statute barred under s 22 of the Limitation of Actions Act 1958 (Vic) (‘LAA’) – Whether s 21 of the LAA applicable – In re Johnson; Sly v Blake (1885) 29 Ch D 964; Attenborough v Solomon [1913] AC 76; Meyeppa Chetty v Supramanian Chetty [1916] 1 AC 603; Ryan v Davies Bros (1921) 29 CLR 527; Ministry of Health v Simpson [1951] AC 251.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms C Sparke QC	Dellios West & Co
For the Defendants	Dr I J Hardingham QC with Mr S Wotherspoon	Arnold Bloch Leibler

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Summary of plaintiff’s claim....................................................................................................... 1

Summary of conclusions................................................................................................................... 2

The facts............................................................................................................................................... 2

Submissions........................................................................................................................................ 6

Defendants..................................................................................................................................... 6
Plaintiff’s submissions............................................................................................................... 11

Summary judgment principles...................................................................................................... 15

Consideration.................................................................................................................................... 16

What if the Will is not proved?................................................................................................. 16
When does the right to receive the share or interest accrue?............................................... 20
The title of Executor.......................................................................................................... 20
Assent.................................................................................................................................. 24

Section 21(1) of the LAA............................................................................................................. 34

Conclusion......................................................................................................................................... 35

HIS HONOUR:

Introduction

In this proceeding, the defendants apply for summary judgment against the plaintiff pursuant to s 63 of the Civil Procedure Act 2010 (Vic) (‘CPA’) on the ground that his claims are statute barred.[1] Alternatively, pursuant to r 23.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) the defendants seek that the plaintiff’s originating motion and summons be struck out.
[1]Summons filed 8 March 2018.

Summary of plaintiff’s claim

The plaintiff’s proceeding was commenced by the filing of an originating motion on 28 September 2017 (‘OM’). The relief sought arises out of the death of the plaintiff’s wife, Kimlarn Simmons (‘Kim’), on 1 January 1986, more than 32 years ago. Kim left a will made on 6 January 1985 (‘Will’) which named the first defendant, Jacquelyn Anne Ross (‘Jacquelyn’)[2] and the fourth defendant, Christine Helen Deveson (‘Christine’) as executrices. It is a simple will, by which Kim leaves all her ‘monies and possessions’ to the plaintiff.[3] The original Will has not be found, just a copy.[4] Kim’s Will has never been proved for probate.
[2]Spelt ‘Jacqueline’ in the OM, ‘Jacquelyn’ in the Summons, in the Will and in her affidavits.
[3]Affidavit of Peter Simmons made 25 September 2017 (‘first Simmons affidavit’), exhibit PS-1.
[4]First Simmons affidavit, exhibit PS-1.

Apart from her husband and children, Kim’s surviving family at her death were her father, William Lyle Ross (‘Lyle’), her mother, Elizabeth Daphne Ross (‘Betty’) and her sisters Jacquelyn, Christine and the fifth defendant, Shona Meredith Messer (‘Shona’). Lyle died on 14 October 2003. Betty died on 10 April 2015 leaving a will probate of which was granted to Jacquelyn, Christine and Shona on 9 October 2015.

In the proceeding, the plaintiff seeks a variety of relief, including calling on Jacquelyn to prove or renounce the Will pursuant to s 15 of the Administration and Probate Act 1958 (Vic) (‘A&P Act’), or for the plaintiff to be granted letters of administration with Will annexed, and for related relief. He maintains that Kim’s deceased estate included 32 shares in a company called Edlyros Pty Ltd (‘Edlyros’), that these shares were wrongfully transferred to Kim’s mother, Betty, and thence under Betty’s will to Jacquelyn, Christine and Shona. He claims that these 32 shares should be called into Kim’s estate, or that Jacquelyn, Christine and Shona should disgorge the shares (received by them from Betty’s estate) and orders that the 32 shares be transferred to, or their value be paid to, him. For the purposes of this application only, the defendants accept that, on death, Kim beneficially held 32 shares in the capital of Edlyros.[5]
[5]Outline of Defendants’ Submissions in Reply dated 14 May 2018 (‘reply submissions’), Attachment A, [1]. The Annual Return of the Company for the 1985 calendar year records Kim as being the holder of 32 shares: Affidavit of Nancy Jacquelyn Collins made 27 February 2018 (‘Collins affidavit’), exhibit NJC-2, 111.

Summary of conclusions

This is not an appropriate case in which to grant summary judgment in favour of the defendants because their contention that the plaintiff’s claims are statute barred proceeds upon an assumption that Kim made a valid Will appointing Jacquelyn executrix. This is not known at this time. It will only be known if the Will is proved. It is only then that it can safely be concluded that, by the conduct of the Jacquelyn’s assent, the plaintiff became entitled to the 32 shares in Edlyros, and that his cause of action accrued more than 15 years before the proceeding was commenced. If, contrary to this assumption, there is an intestacy and a grant of administration to Jacquelyn or the plaintiff, the entitlement to the 32 shares, if they fall into the Kim’s estate, has not yet accrued.

If, on the other hand, the Will is proved and Jacquelyn appointed executrix, on the arguments advanced by the defendants and considered below, the plaintiff’s claim to the 32 shares is statute barred.

The facts

The following account of the facts is largely, although not entirely, undisputed. It is based on the recitation of the facts set out in the affidavits filed in support of the OM and in support of, and in opposition to, the defendants’ summons, in the defendants’ outline[6] and reply submissions[7] and the plaintiff’s written submissions.[8]
[6]Outline of Defendants’ Submissions, prepared by IJ Hardingham QC and RS Wotherspoon, of Counsel, and dated 13 April 2016 (‘defendants’ outline’).
[7]Outline of Defendants’ Submissions in Reply, 14 May 2018, Prepared by IJ Hardingham QC and RS Wotherspoon, of Counsel (‘reply submissions’).
[8]Plaintiff’s Outline of Submissions on Limitation Point, dated 8 May 2018, prepared by Carolyn Sparke QC, of Counsel (‘plaintiff’s submissions’).

Lyle and Betty were married with four daughters: Jacquelyn, Christine, Shona and Kim.[9] Lyle and Betty were directors of Edlyros. According to the Edlyros annual return dated 28 November 1983, Betty held 377 shares and each daughter held 32 shares.[10]
[9]Jacquelyn born 17 March 1956, Kim born 6 December 1957, Christine born 14 December 1959 and Shona born 30 January 1965.
[10]Collins affidavit, exhibit NJC-2, 103.

On 6 January 1985 Kim made a will naming her sisters Jacquelyn and Christine as executrices. She bequeathed all ‘monies and possessions’ to her husband, the plaintiff.

Kim died in a car accident on 1 January 1986. The plaintiff was in the car and was seriously injured. They had two children, Jeremy and Georgia. After coming out of hospital, but when still seriously affected by his injuries, he was asked by Lyle to sign a document that was presented to him. The circumstances of the signing may be relevant at some point, but not for the purposes of this application. The document in question is likely to be a letter dated 27 June 1986 (‘the 27 June document’) addressed to the directors of Edlyros requesting the transfer of ‘the right title and interest in any share, assets or dividends’ in Edlyros due to Kim to their children Jeremy and Georgia Simmons.[11]
[11]Affidavit of Jacquelyn Anne Ross sworn 27 February 2018 (‘first Jacquelyn affidavit’), exhibit JAR-2.

There has been no application for, nor any grant of, probate in respect of Kim’s Will. There has been no other grant of representation in respect of Kim’s deceased estate. The evidence relating to the administration of her estate is very limited and, in some irrelevant respects, disputed.

The plaintiff deposes to signing the 27 June document, he refers to he and Kim owning property jointly, and to the Ross family lawyers, Arnold Bloch Leibler, doing the conveyancing for those properties (presumably survivorship applications).

Christine says that the plaintiff is wrong about who did the conveyancing. It was Arthur Robinson & Co, where she had worked and who had acted for the plaintiff and Kim when they acquired a business in Belmore Road North Balwyn. She had contacted Mr Tony Browne of that firm after Kim’s death to tell him the plaintiff would need help closing the business.[12] She was never told that she had been appointed an executrix under Kim’s will, either by Kim or by her father. She believes her father kept this from her to protect her from further pain and distress. Christine did not learn that Kim had made a will naming her as an executrix until 2004. At that time she also learnt that she was a shareholder in Edlyros.
[12]Affidavit of Christine Helen Deveson made 27 February 2018 [3].

Shona says that Lyle assisted the plaintiff close the shop in Belmore Road. She only became aware she was a shareholder in Edlyros after her father died.[13]
[13]Affidavit of Shona Meredith Messer made 27 February 2018 [3]-[4].

Jacquelyn says she has ‘a memory’ that sometime in the 1980’s, within a year or so of Kim’s death, Lyle told her she was Kim’s executrix. She did not ‘really know’ what was required by the office and Lyle said he would look after Kim’s affairs.[14] She discovered a copy of Kim’s Will whilst helping her mother assemble information about Lyle’s estate.[15] She does not remember doing anything in relation to the administration of the estate. However she identifies her signature on a share transfer dated 23 December 1986, as executrix of Kim’s estate, to Betty, who also signed it. She says that the handwriting on the share transfer is that of Lyle. The transfer was of the 32 shares in Edlyros, referred to below as not having been registered.[16]
[14]First Jacquelyn affidavit [7].
[15]First Jacquelyn affidavit [5].
[16]First Jacquelyn affidavit [8].

From 1987 to 2007 the annual returns of Edlyros recorded that Kim’s shares were held by the estate of K E Simmons or by Jacquelyn as executrix or by Jacquelyn ‘non-beneficially’.[17] The annual returns for Edlyros show that:
[17]A detailed description of how the shares were held is set out later in these reasons, drawn from Collins affidavit and as summarised in the reply submissions, Annexure A.

(a) for 1986, 1987, 1988, 1989, 1990, 1991 and 1992 financial years the 32 shares were held by the ‘Estate of KE Simmons’;

(b) for the 1993 and 1994 financial years the shares were held with the designation ‘KE Simmons (Estate) - Executor Jacquelyn Anne Ross’;

(c) for the 1995, 1996, 1997, 1998 and 1999 financial years, the shares were held in the name ‘Executor Jacquelyn Anne Ross for KE Simmons Estate’;

(d) for the 2000 financial year, the estate’s shares were not recorded as being held for the estate or in Jacquelyn’s capacity as executrix;

(e) for the 2001 and 2002 financial years, the estate’s shares were recorded as being non-beneficially owned by Jacquelyn;

Annual returns were abolished in 2003 and ASIC introduced a system of annual company statements. The 2008 annual company statement recorded the estate’s shares as being non-beneficially owned by Jacquelyn. The register of members of Edlyros recorded that Jacquelyn Anne Ross for the Estate of KE Simmons held the 32 shares up to 12 June 2008, at which time they were transferred to Betty.

The records of Edlyros kept by its current accountant include:

(a) a handwritten letter from Lyle, dated 15 August 1968, to his then accountant, Leonard Morrow of Morrow and Stanley Accountants, stating ‘when issuing shares in Edlyros P/L to our girls, would you please ensure that they are issued as “held in trust” for Betty and I’;[18]

(b) a standard share transfer form dated 23 December 1986 which purports to record the transfer from Jacquelyn, as executrix of Kim’s deceased estate, to Betty of 32 ordinary shares in Edlyros.[19] This transfer seems not to have been registered. On 31 December 1986, the annual return of Edlyros recorded that the shares were held for the ‘Estate of KE Simmons’.[20]

[18]Affidavit of Daniel Bernard Lustig made 26 February 2018 (‘Lustig affidavit’) [10], exhibit DL–6.

[19]Lustig affidavit [9], exhibit DL–5.

[20]Collins affidavit, exhibit NJC–2, 115.

Lyle died on 14 October 2003.[21] Probate of his will was granted to Betty on 2 January 2007.[22] Jacquelyn, Christine and Shona became directors of Edlyros on 24 July 2007.[23]
[21]Lustig affidavit [2], defendants outline [7].
[22]First Jacquelyn affidavit [3].
[23]Lustig affidavit exhibit DL–3.

In June 2008, Betty instructed the accountants for Edlyros to transfer the 32 shares, recorded as held non-beneficially in Jacquelyn’s name, to Betty. The record of the instruction is that it ‘should have been done on 23/12/86’. On 18 June 2008, Jacquelyn executed a share transfer in respect of the 32 shares in favour of Betty. The transfer records that they were held by Jacquelyn on account of the estate of Kim.[24]
[24]Lustig affidavit [12], exhibit DL–8.

On 10 April 2015 Betty died leaving a will dated 28 June 2001. The will appointed Jacquelyn, Christine and Shona as executrices (in the circumstances where Lyle had predeceased Betty) and left Betty’s residuary estate to the three daughters equally. The residuary estate included Betty’s shares in Edlyros. Probate of Betty’s will was granted on 9 October 2015 to Jacquelyn, Christine and Shona.[25] On 12 April 2016, in accordance with her will, Betty’s 409 Edlyros shares were divided between and distributed to the three daughters and two further shares were issued, one to Shona and one to Christine, to achieve equality between them.[26]
[25]First Simmons affidavit [5], exhibit PS–2.
[26]Lustig affidavit [21]–[22], exhibits DL–14, DL–15.

Submissions
Defendants

The defendants submit that because the plaintiff’s proceeding involves a claim to the personal estate of Kim under her Will, s 22 Limitation of Actions Act 1958 (Vic) (‘LAA’), bars such a claim after the expiration of 15 years ‘from the date when the right to receive the share or interest accrued’. It was submitted that in this case that means after the expiration of 15 years from the date when the right to receive the 32 shares arose. That was said to have been at the expiration of the executor’s year in January 1987 or at latest by 27 September 2002.[27]
[27]15 years and one day before the proceeding was commenced.

The defendants submitted that:

(a) an executor derives title from the will and a grant of probate is not essential in the case of personal property. Edlyros required no grant of probate before transferring the 32 shares to Jacquelyn;

(b) persons claiming a share in the personal estate of a deceased person have no right to receive any of the estate until the assets have reached the hands of the executor, debts have been paid and the executor has assented by acknowledging that there is no longer any impediment to distribution;

(c) from 31 December 1986 until 12 June 2008 Jacquelyn held the 32 shares for Kim’s estate. In that 22 year period the shares were not dealt with for any purpose of administering the estate. Nothing ‘executorial’ was done with them. They were not charged or realised for the purposes of paying debts or liabilities of the estate. There were no specific legacies to be paid. The shares remained in the name of the estate or the executor of the estate;

(d) the proper inference to be drawn from those circumstances is that Kim’s executrix had assented to the dispositions in the Will by the end of the executor’s year and certainly by 27 September 2002. Assent may occur informally and may be inferred from circumstances.[28] The long period following the initial share transfer during which no executorial functions occurred strengthens the conclusion that assent took place;[29]

(e) following assent, the plaintiff’s inchoate right to due administration was transformed into a complete and perfect entitlement to the Edlyros shares. Where the estate’s assets have been got in within a year of death, there is high authority for the proposition that the accrual of a beneficiary’s right to receive the share or interest in the estate occurs on the expiration of the executor’s year.[30]

[28]Attenborough v Solomon [1913] AC 76, 83 (Viscount Haldane LC).

[29]Ibid.

[30]In re Johnson; Sly v Blake (1885) 29 Ch D 964,970-971 (Chitty J); Ministry of Health v Simpson [1951] AC 251, 277 (Lord Simonds); A&P Act s 49.

The executor’s year reflects a willingness to allow an executor a year from date of death to administer the estate. In this case it is likely that administration was completed within the executor’s year. The plaintiff can point to no acts of administration from 1 January 1987 to 2008. Indeed, his own case is that nothing was done from 1987 to 2008. The plaintiff describes Jacquelyn in this period as a ‘bare trustee’, a description which is entirely consistent with completion of administration.[31]
[31]Plaintiff’s submissions [14]. The plaintiff's reference to the year 1997 in the first line of paragraph [14] of his submissions should be a reference to 1987.

The defendants therefore say that any right that the plaintiff may have had to receive the 32 shares he claims as his entitlement under Kim’s Will (which the defendants’ dispute) arose one year after Kim’s death in 1986 with the expiration of the executor’s year.[32] Accordingly, and subject to section 21(1) of the LAA, the plaintiff’s claim is now, and has been since about 2001, statute-barred. If the substantive claim is statute-barred, the application under s 15 of the A&P Act is pointless and also statute-barred.
[32]Ministry of Health v Simpson [1951] AC 251, 277 (Lord Simonds).

The defendants submitted that for the purposes of s 21(1)(a) of the LAA, fraud denotes dishonesty or a consciousness that what is being done is wrong.[33] There is no allegations of fraud, in the relevant sense, in the indorsement of the claim on the OM. Such an allegation would have to be pleaded and particularised. The defendants say that all the plaintiff alleges is that ‘Kim’s shares have been transferred to the wrong person, Elizabeth Ross’.[34] They also suggest that the transfer to Betty was the accountant’s idea.[35] In any event, by reference to the evidence and the indorsement on the OM they submit there is no suggestion of fraud nor that the existence of the shares was dishonestly concealed, referring to the 27 June document.
[33]Banque Commerciale SA v Akhil Holdings (1990) 169 CLR 279, 286 (Mason CJ and Gaudron J); Armitage v Nurse [1998] Ch 241 (CA) 260-261 (Millett LJ); JD Heydon, MJ Leeming, Jacobs‘ Law of Trusts in Australia (LexisNexis Butterworths, 8th ed, 2016) [22]–[26].
[34]First Simmons affidavit [16].
[35]Defendants’ outline [16], Lustig affidavit [11].

The defendants submitted that s 21(1)(b) of the LAA contemplates a pre-existing trust under which the claimant is a beneficiary and a claim for the recovery of trust property already subjected to a trust from a person who is already a trustee of that trust property.[36] In summary, the trustee is held to have assumed the position of trustee on behalf of the beneficiary. In Nolan v Nolan,[37] Ormiston JA distinguished between institutional constructive trusts and remedial constructive trusts and concluded that s 21(1)(b) applied to the former but not to the latter.
[36]Nolan v Nolan [2004] VSCA 109 [63].
[37]Ibid [60].

The defendants asserted that the plaintiff was aware from at least 27 June 1986 of his claim to his wife’s shares.

In McNab v Graham,[38] the Court of Appeal did not embrace Ormiston JA’s dichotomy between institutional and remedial constructive trusts in the context of s 21(1)(b), but otherwise accepted Ormiston JA’s reasoning. In McNab[39] the Court was dealing with a claim to trust property based on notions of proprietary estoppel. Tate JA noted that, for the purposes of the instant case, the relevant distinction is ‘between trustees of a constructive trust which is proprietary in nature, being founded upon an assumption as to the future ownership of property being induced by representations upon which there has been detrimental reliance, and those who are loosely labelled ‘constructive trustees’ because they are wrongdoers’.[40]
[38][2017] VSCA 352 (‘McNab’).
[39]Ibid.
[40]Ibid [122].

The defendants submitted that, at its highest, it may have been arguable that, until 2008 when Jacquelyn transferred the 32 estate shares to Betty, the plaintiff could have relied on s 21(1)(b). However, that provision ceased to operate following the 2008 transfer: Jacquelyn no longer held the shares; nor had she converted them to her own use. Section 21(1)(b) does not apply to an action against Betty: she never assumed to hold the shares in trust for Kim’s estate.

Jacquelyn, Christine and Shona, as executrices of Betty’s will and as beneficiaries under it, are not subject to s 21(1)(b). In their capacity as executrices of Betty’s will and residuary beneficiaries of her estate, they did not assume to hold the shares on trust for Kim’s estate.

More fundamentally, however, any scope for the operation of s 21(1)(b) terminated in 2008, while the period of limitation contemplated by s 22 expired in or about 2001.

The defendants submitted that there is no substance in the plaintiff’s contention (see below at [37(c)]) that Jacquelyn was not a personal representative of Kim’s estate and that the plaintiff could not compel his interest in the estate to be distributed to him. In Re Crowhurst Park, Sims-Hilditch v Simmons,[41] Goulding J considered the expression 'personal representative' and concluded that it includes an executor, whether he or she has proved the will or not.[42]
[41][1974] 1 WLR 583.
[42]Ibid 593–594 (Goulding J).

For the purposes of s 22 of the LAA, the plaintiff’s right to receive the shares accrued to him by the end of the executor’s year. In any event administration was well and truly completed by 27 September 2002 and consequently, the plaintiff’s right to receive the shares accrued to him more than 15 years before he commenced his action.

As to the plaintiff’s alternative contention that s 22 of the LAA operated to extend the time for action to be brought to recover part of an estate which has been wrongly taken by a third party (see below at [39]), the defendants submitted that this was misconceived and contrary to the decision in In re Diplock.[43] The defendants submitted that nothing said in obiter by Ormiston JA in Nolan v Nolan[44] is inconsistent with that proposition. As a matter of principle, it is illogical that a beneficiary’s right to receive personal property accrues on its misapplication. A right to receive the personal estate of the deceased arises when the beneficiary has a right to demand it. That right is not conditioned on any subsequent misapplication by the executor.
[43][1948] Ch 465, affirmed Ministry of Health v Simpson [1951] AC 251.
[44][2004] VSCA 109 [51], [81].

For these reasons, the defendants submitted the 15 year limitation period provided by s 22 of the LAA bars the plaintiff’s action. Consistently with the overarching purpose of the CPA, the plaintiff’s claim is manifestly one that should be determined summarily and the proceeding should be dismissed with costs.

Plaintiff’s submissions

Counsel for the plaintiff contended in her written submissions that the right to receive the 32 shares accrued either in 2008 or when a grant of representation is made and administration takes place. The submissions were in summary as follows:

(a) a beneficiary of an estate has no right in any particular assets of the estate until administration is complete.[45] The rights of a beneficiary of an unadministered estate are to compel due administration of it, to have their interest paid to them once ascertained and to seek distribution of their share after the end of the executor’s year. This right does not crystallise until a grant of probate is made;

(b) because no grant of probate has been made, the plaintiff’s right to ‘receive a share’ in the estate has not yet crystallised, the estate not yet having been administered;

(c) the executor’s year is defined by s 49 of the A&P Act and applies to the obligation of a ‘personal representative’ to distribute. ‘Personal representative’ is defined in s 5 of that Act as the executor or administrator for the time being. Nolan v Nolan[46] was said to shed further light on the definition of a ‘personal representative’ as it concluded that an executor de son tort was not a ‘personal representative’ per se.[47] Whilst the role carries some of the benefits and burdens of executorship, it is not the role of executor or of trustee per se. Therefore, it was said, that s 49 could not be used against a person not a ‘personal representative’ and the plaintiff could not compel his interest in the estate to be distributed to him at that time.

[45]Livingston vCommissioner of Stamp Duties (1964) 112 CLR 12; affirmed on appeal Commissioner of Stamp Duties v Livingston [1965] AC 694.

[46][2004] VSCA 109.

[47]Ibid [49].

The plaintiff submitted that there is analogy, albeit faint, in a case of In re Loftus, Green v Gaul.[48] That case dealt with an application to remove an administrator of an intestate estate who had transferred assets to herself. The Court held that an application to remove the personal representative was not an action to which the English equivalent of s 22 applied, however it also commented, albeit cautiously, about the lapse of time. The Court said that the ‘better view’ was that time (for removal of an personal representative) started running from when the administration was complete. Thus, because no grant of representation of Kim’s estate has been made, and the estate is not yet been administered, the plaintiff’s right to compel the receipt of a share of the estate has not yet sprung into existence.
[48][2007] 1 WLR 591.

The plaintiff submitted, in any event, that the evidence did not establish that the administration of Kim’s estate was complete. If one assumes that Jacquelyn acted in the role of executrix, there is no evidence that she has taken any steps to carry out the administration: no evidence she did anything to pay funeral expenses, to ascertain whether there were debts, to ascertain whether there were creditors of any sort or to advertise.

Further, Counsel for the plaintiff submitted that:

(a) because Jacquelyn did not know anything about being an executrix and left it all to her father, there is no basis for the conclusion that the estate had been administered, or the inference of an assent to the vesting of the shares in the plaintiff, prior to 27 September 2002;

(b) there is no evidence that steps were taken to administer this estate so as to get to the point of making a decision that assets are no longer required for the purpose of administration by the named executrices, or more particularly by Jacquelyn. In this regard, the decision in Attenborough v Solomon[49] is distinguishable;

(c) if the dealing with the 32 shares was in fact undertaken by Jacquelyn or Lyle, as an executrix or executor de son tort, can they have assented to the vesting of the shares in the plaintiff?

(d) there can be no assent unless and until there is a grant of probate. This follows from s 41 of the A&P Act, and the meaning given to ‘personal representative’ in s 5, and the operation of s 17, of that Act.

[49][1913] AC 76.

The plaintiff submitted, in the alternative, that the plaintiff’s right to receive the share or interest in Kim’s estate, and thus his cause of action, accrued in 2008 upon the wrongful transfer of the 32 shares to Betty. This is because:

(a) between 1997 to 2008 Jacquelyn held Kim’s shares as a bare trustee on behalf of the estate. She did nothing with the shares, took no steps to obtain representation and took no steps to administer the estate. In 2008 she wrongly dealt with those shares, in that she transferred them to a person who was not the beneficiary under Kim’s will;

(b) Nolan v Nolan[50] dealt with similar circumstances. That case involved an allegation that Sidney Nolan had taken paintings which properly belonged to the estate of Cynthia Nolan, and in 1976-7 converted them to his own use without the right to do so. There had been a grant of probate of Cynthia Nolan’s estate. The plaintiff claimed she was the rightful owner of the converted artworks. The plaintiff was a beneficiary of the estate of Cynthia Nolan, seeking to have the estate of Sidney Nolan held liable for the conversion of the paintings. Ormiston J said in relation to s 22 of the LAA that:
[50][2004] VSCA 109.

It has been held by the Court of Appeal (see Re Diplock’s Estate) that the section also applies to claims against overpaid or wrongly paid beneficiaries. If that be the case, subject only to the operation of s.21(1) and (2), there would seem little reason not to bring within the section (and thus impose a 12-year limit) a claim to recover part of the personal estate of a deceased person which had been wrongly taken by a third party, as is asserted.[51]

In rejecting any claim against Sidney Nolan as trustee, Ormiston J concluded that that any claim against Sidney Nolan as trustee would have expired against him 12 years from the date of the wrongful conversion;

(c) thus the Court contemplated that s 22 would operate to extend time for action to be brought to recover part of an estate which has been wrongly taken by a third party. In the present case, it was 2008 when the shares were wrongly taken by a third party.

[51]Ibid [51] (citations omitted).

When the proceeding was commenced, the plaintiff had a copy of Kim’s Will. The OM was drawn on the assumption that the original Will was in possession of Jacquelyn or other members of the family and would be capable of proof. That is now not clear as only a copy can be found. That means that the presumption of revocation must be overcome.

The presumption of revocation arises where the will last known to have been in the possession of the testator cannot be found on her death, then the will must have been destroyed with the intention of revoking it. It cannot be assumed that the original of Kim’s Will can be found or that copy of Kim’s Will is capable of proof. Neither the Court nor the parties can operate on the assumption that Kim’s Will can be proved and the plaintiff’s rights will be what they seem to be under the Will. That means it cannot be safely inferred that the plaintiff’s rights already have sprung into existence as a result of an assent and did so more than 15 years ago. There is thus a matter to be investigated.

Further, if proof of the Will fails, and in the result Kim died intestate, the plaintiff is entitled on an intestacy, and as father of the two children may seek, to be appointed administrator of the estate. It is clear that if there is an intestacy, there can have been no assent until after grant as the title of administrator depends on the grant of letters of administration.

Summary judgment principles

The defendants’ application for summary judgment and dismissal of the plaintiff’s proceeding is made under s 62 and s 63(1) of the CPA.

Sections 62 and 63(1) of the CPA provide:

62A defendant in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a plaintiff's claim or part of that claim has no real prospect of success.
63(1)Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.

The proper approach to the determination of an application under ss 62 and 63 was explained in Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd[52] as follows:

(a)the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ’real’ as opposed to a ’fanciful’ chance of success;
(b)the test is to be applied by reference to its own language and without paraphrase or comparison with the ’hopeless’ or ’bound to fail test’ essayed in General Steel;
(c)it should be understood, however, that the test is to some degree a more liberal test than the ’hopeless’ or ’bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d)at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[53]

[52](2013) 42 VR 27 (Warren CJ, Nettle and Neave JJA).

[53]Ibid 40 [35] (Warren CJ and Nettle JA).

If the Court finds that the proceeding has no real prospect of success, it has a broad residual discretion,[54] to be exercised consistently with the overarching purposes of the CPA,[55] to nonetheless refuse the application because:

(a) it is not in the interests of justice to do so; or

(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.

[54]CPA s 64; Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd (2011) 35 VR 1, 8–9 [12] (Dixon J).

[55]Ibid 42 [41]–[42] (Neave JA).

The observations of the plurality of the High Court in Wardley Australia Ltd v Western Australia[56] regarding the striking out of claims at an interlocutory stage, despite the very different circumstances of that case compared with this, are apt:

We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases.

[56](1992) 175 CLR 514, 533 (‘Wardley’).

This observation of the High Court reinforces the need to continue to exercise the power to terminate proceedings summarily with caution where it is based on an argument that the cause of action is statute barred.

Consideration
What if the Will is not proved?

One of the final submissions advanced orally by Counsel for the plaintiff was, in effect, that there is no certainty that the copy of Kim’s Will can be proved and the consequence of that is, possibly, that there will be an administrator appointed. Counsel for the defendants was taken aback by this submission, which came late in the argument as something of an afterthought in consequence of a question that I asked.

As an answer to the application for summary dismissal of the claim as primarily advanced it is, as Counsel for the defendants indicated, breathtaking. The primary claim is for Jacquelyn, as a named executrix in Kim’s Will, to bring the Will into court and having got a grant, to account for the 32 shares to the plaintiff, or alternatively, if those shares cannot be accounted for, to account for the value of the shares to him, and for consequential relief against third parties.

Unfortunately for the defendants, that is not the only relief the plaintiff seeks, and perhaps not even the most likely relief. The alternative relief is that if the original Will cannot be found, there be a grant of letters of administration, with the copy Will annexed, to Jacquelyn or alternatively to the plaintiff.

Where a will, last traced to the possession of the testator, cannot be found at the time of the testator’s death after all reasonable searches and inquiries, it is presumed to have been destroyed by the testator with the intention of revoking it, animo revocandi.[57]
[57]Welch v Phillips (1836) 1 Moo PC 299; (1836) 12 ER 828 (Parke B); Colvin v Fraser (1829) 2 Hag Ecc 266; (1829) 162 ER 856 (Sir John Nicholl); Cahill v Rhodes [2002] NSWSC 561 (10 July 2002); McCauley v McCauley (1910) 10 CLR 434, 438 (Griffith CJ); Re Riordan [1961] VR 271; Whiteley v Clune (No 2) the estate of Brett Whiteley (Unreported, Supreme Court of New South Wales, Powell J, 13 May 1993) 27 (‘Whiteley v Clune’); Re Warren (deceased) [2014] QSC 101 (21 May 2014) [11] (Peter Lyons J); see also John G Ross Martyn and Nicholas Caddick (eds), Williams, Mortimer and Sunnucks on executors, administrators and probate (Sweet & Maxwell, 20^th ed, 2013) 242 [14–28] (‘Williams’); Alun A Preece, Lee’s Manual of Queensland Succession Law (Lawbook Co, 7^th ed, 2013) [5.200]. Re Moschoudis [2016] VSC 139 [4].

The principles to be applied in a probate application with respect to a lost will were set out by Campbell J in Cahill v Rhodes,[58] as follows:
[58][2002] NSWSC 561 [55]; Re Moschoudis [2016] VSC 139 [9]–[17].

(a) it must be established that there actually was a will, or a document purporting to embody the testamentary intentions of a deceased person;

(b) it must be shown that that document revoked all previous wills;

(c) the presumption that when a will is not produced it has been destroyed must be overcome;

(d) there must be evidence of its terms;

(e) there must be either evidence of due execution or that the deceased person intended the document to constitute his or her will.

In this case it is the rebuttal of the presumption of revocation that is likely to be in issue. In Re Moschoudis,[59] McMillan J extracted the following statement regarding the presumption of revocation from the decision of Campbell J in Cahill v Rhodes:[60]

The present position would now seem to be as follows: — 1. although, where a Will is traced into the possession of the testator and is not forthcoming on his death, there is a presumption that he destroyed it animo revocandi, the presumption may be rebutted; 2. the strength of the presumption depends upon the character of the testator's custody over it (Sugden v Lord St Leonards; Allan v Morrison; McCauley v McCauley); 3. where the Will makes a careful, and complete, disposition of the testator’s property, and there are no other circumstances to point to a probable destruction, animo revocandi, by the testator, the presumption is so slight that it may be said not to exist (Sugden v Lord St Leonards; Finch v Finch); 4. where a Will is lost or destroyed, and the presumption of destruction, animo revocandi, either, does not arise, or, is rebutted, its contents may be proved by parol evidence. The “rules” laid down in Sugden v Lord St Leonards are as follows: a. the contents of any lost instrument, including a Will, may be proved by secondary evidence; b. written and oral declarations of a testator made before, or after, the execution of the Will are admissible as secondary evidence of its contents; c. the evidence of a single witness, although interested, is admissible to prove the contents if his veracity and credibility are unimpeached; d. Probate may be granted of so much of the contents as may be proved, even though proof is not available of the entirety. It should, however, be noted that, at least insofar as (b) and (d) are concerned, Sugden v Lord St Leonards, although not overruled, has not escaped criticism (Woodward v Goulstone; Atkinson v Morris) so that it is improbable that the “rules” will be extended.[61]

[59][2016] VSC 139 [9]–[17].

[60][2002] NSWSC 561 [55]; Re Moschoudis [2016] VSC 139 [11].

[61]Cahill v Rhodes [2002] NSWSC 561 [58].

Drawing on a range of authorities McMillan J concluded that:[62]
[62]Re Moschoudis [2016] VSC 139 [16]–[17].

(a) if the probabilities of loss or destruction are equal, the presumption of destruction must prevail;[63]
[63]McCauley v McCauley (1910) 10 CLR 434, 440.

(b) rebutting the presumption does not require the party propounding the copy will to show how the will came to be lost or destroyed; rather, they must establish that the presumption does not apply in the circumstances;[64]

(c) the presumption of revocation is a presumption of fact that may be rebutted by appropriate evidence;[65]

(d) the onus of rebutting the presumption falls on the party propounding the copy will as they assert that the original will is lost and that the named executor in the copy will intends to have the copy will admitted to probate.[66]

[64]Lippe v Hedderwick (1922) 31 CLR 148.

[65]Whiteley v Clune (Unreported, Supreme Court of New South Wales, Powell J, 13 May 1993) 27; Colvin v Fraser (1829) 2 Hag Ecc 266 ; (1829) 162 ER 856 (Sir John Nicholl); Welch v Phillips (1836) 1 Moo PC 299; (1836) 12 ER 828 (Parke B).

[66]Re Gerard (dec’d) (2007) 1 ASTLR 206; (2007) 251 LSJS 176; [2007] SASC 362 (10 October 2007) [34] (Gray J), citing Allan v Morrison [1900] AC 604 and Re Molloy [1969] 1 NSWR 400.

It is evident that a more extensive investigation is required and that on the evidence currently before the Court no conclusions can be drawn on the prospect of success of Jacquelyn in rebutting the presumption of revocation. There must be a risk that the presumption cannot be rebutted in light of the passage of time and the death of both Lyle and Betty.

I cannot, therefore, assume that the original of Kim’s Will can be found or that the copy of Kim’s Will is capable of proof. Neither the Court nor the parties can operate on the assumption that Kim’s Will can be proved and the plaintiff’s rights will be what they seem to be under the Will. That means it cannot be safely inferred that the plaintiff’s rights already have sprung into existence as a result of an assent and did so more than 15 years ago.

Put another way, the application to dismiss proceeds on an assumption that Kim made a valid Will appointing Jacquelyn executrix. This is not known at this time. It will only be known if the Will is proved. It is only then that it can safely be concluded that, by the conduct of Jacquelyn’s assent, the plaintiff became entitled to the 32 shares in Edlyros, and that his cause of action accrued more than 15 years before the proceeding was commenced. There is thus a matter to be investigated.

Further, if proof of the Will fails, and in the result Kim died intestate, the plaintiff is entitled on an intestacy, and as father of the two children may seek to be appointed administrator of the estate. It is clear that if there is an intestacy, there can have been no assent until after grant as the title of administrator depends on the grant of letters of administration.

In these circumstances, this is not an appropriate case to summarily dismiss the plaintiff’s claim. This is particularly so having regard to the cautionary statement of the High Court in Wardley.[67]
[67](1992) 175 CLR 514.

However, in case I am wrong in this conclusion, and as I have had the opportunity of hearing argument on, and considering, the parties’ other submissions, I will provide my consideration of their relative merits on the footing that the Will is proved and Jacquelyn’s conduct as executrix is confirmed and she is appointed executrix.

When does the right to receive the share or interest accrue?

The central question is when does the ‘right to receive the share or interest’ within the meaning of s 22 of the LAA accrue? That is because s 22 of the LAA provides:

Subject to the provisions of subsection (1) of the last preceding section no action in respect of any claim to the personal estate of a deceased person or to any share or interest in such estate, whether under a will or on intestacy, shall be brought after the expiration of fifteen years from the date when the right to receive the share or interest accrued.

The title of Executor

It is well established, that the executor derives title from the will of the deceased and not from the grant of probate, although the grant provides conclusive evidence of the executor’s appointment and of the terms of the Will.[68] In Meyeppa Chetty v Supramanian Chetty[69] Lord Parker, in delivering the opinion of the Privy Council in an appeal from the Supreme Court of the Straits Settlement (Settlement of Singapore), said:

It is quite clear that an executor derives his title and authority from the will of his testator and not from any grant of probate. The personal property of the testator, including all rights of action, vests in him upon the testator’s death, and the consequence is that he can institute an action in the character of executor before he proves the will. He cannot, it is true, obtain a decree before probate, but this is not because his title depends on probate, but because the production of probate is the only way in which, by the rules of the Court, he is allowed to prove his title. An administrator, on the other hand, derives title solely under his grant, and cannot, therefore, institute an action as administrator before he gets his grant. The law on the points is well settled…[70]

[68]Ryan v Davies Bros (1921) 29 CLR 527, 536; Meyeppa Chetty v Supramanian Chetty [1916] 1 AC 603, 608 (Lord Parker);Richard George De B Griffith and Ross A Sundberg, Griffith’s Probate Law and Practice in Victoria (The Law Book Co., 3^rd ed, 1983) 10; Wills Probate and Administration Service Victoria [s 5.65]; O’Brien v Hall [2015] VSC 52 [45(b)].

[69][1916] 1 AC 603.

[70][1916] 1 AC 603, 608. This statement was accepted as a conclusive and authoritative statement in English Court of Appeal in Ingall v Moran [1944] KB 160. See also Whitmore v Lambert [1953] 1 WLR 495 and In re Crowhurst Park, Sims-Hilditch v Simmons [1974] 1 WLR 583, 591.

The common law principle that the title to the personal estate of the deceased vests in the executor named in the will from the date of death was confirmed by the Court of Appeal in Fifteenth Eestin Nominees Pty Ltd & Ors v Rosenberg.[71]
[71](2009) 25 VR 155 [32].

Although the executor derives title from the will, the office is not constituted until the person accepts the office, expressly or by conduct.[72] A grant of representation is evidence of the executor’s status and is necessary to transfer certain assets, for example land under the operation of the Transfer of Land Act 1958 (Vic). But a grant of probate is not essential to the existence of the office.[73] Nor is it necessary to obtain a grant in order to administer and deal with the assets of the estate where proof of title is not required.[74] Thus, depending on the nature of the assets in the estate (and not necessarily their value), it may be possible for an executor to fully administer an estate without ever obtaining a grant of representation from this Court.[75]
[72]Williams, above n 57, [9-01]–[9-03]; Neville Crago ‘Executors of Unproved Wills: Status and Devolution of Title in Australia’, , (1993) 23 UWA Law Review 235, 237, fn 4 (‘Crago’); In Re Stevens; Cooke v Stevens [1897] 1 Ch 422 (North J).
[73]Crago, above n 72, 237; In Re Stevens; Cooke v Stevens [1897] 1 Ch 422 (North J), 429; affirmed on appeal in In Re Stevens; Cooke v Stevens [1898] 1 Ch 162. In the primary decision, North J notes by reference to Williams on Executors, 9^th Ed, 249, that executors may do almost all the acts which are incident to his office before he proves the will. The sticking point is that for the executor to compel by action the recovery of a debt or other thing, or to establish the right to assent to a specific legacy or give a valid title to a legatee, the proof of the right depends upon the will of the deceased which can only be effected by producing the probate or by other evidence of the admission of the will in the Court.
[74]Counsel for the plaintiff conceded as much in her oral submissions: Transcript of Proceedings, Simmons v Ross & Ors (Supreme Court of Victoria, 3921/2017, Derham AsJ, 17 May 2018) 17.
[75]Crago, above n 72, 236, 238–9.

An executor who takes title in personal property in Victoria may pass it to a third party, whether as purchaser or as volunteer.[76] There is no separate equitable estate to be taken account of while the estate is in the course of administration.[77] As a matter of law, the property may simply be sold or given. Whether the executor can do so without producing a grant of probate to prove title is a question of practicality not law. The purchaser or donee might decline to accept the property without proof of the executor’s title to sell or give it. As the defendants pointed out in their reply submissions, the Supreme Court’s website records:[78]

It is not always necessary to apply for probate or administration when someone passes away. Often it will depend on what assets have been left behind by the deceased, and the requirements of institutions holding those assets… Sometimes these tasks can be done informally, without requiring anything from the Court.[79]

[76]Ibid.

[77]Commissioner of Stamp Duties (QLD) v Livingston (1964) 112 CLR 12, 17; Crago, above n 72, 247, fn 52.

[78] should be noted, however, that specific provision is made in the A&P Act for payments of money and the transfer of personal property without a grant of representation where the value is not more than a ‘threshold amount’: A&P Act ss 31A, 31B.

Further, there is no rule of law that an executor who has accepted the office must prove the will and obtain a grant of representation.[80] Under s 15 of the A&P Act the executor may be called upon to prove the will, and thus obtain a grant of probate, or renounce it.
[80]Crago, above n 72, 239, fn 14.

The title of the executor to personal property of the testator is to be distinguished from the title to real property. In Victoria, real property[81] of the testator still vests in the heir-at-law between the date of death and the grant of probate or administration. Upon the grant of representation the real property vests ‘as from the death’ of the testator in the executor or administrator.[82]
[81]In s 13 of the A&P Act called ‘hereditaments’, which includes corporeal hereditaments (land and buildings) and incorporeal hereditaments (easements etc), commonly described as real property.
[82]A&P Act s 13, Larkin v Drysdale (1875) 1 VLR (L) 164; Re McDonald’s Settlement [1928] VLR 241; Macleay v Treadwell [1937] AC 626; RG de B Griffith, RA Sundberg Griffith’s Probate Law and Practice in Victoria, (Law Book Co., 3^rd ed. 1983) 23, fn 13; LexisNexis, Wills Probate and Administration Service Victoria, vol 1 [s 13.1]; Fifteenth Eestin Nominees Pty Ltd & Ors v Rosenberg (2009) 25 VR 155 [32].

One matter that flows from the re-statement of the law set out above is whether on the facts of this case either Jacquelyn or Christine, the named executrices in Kim’s Will, accepted the office of executrix. The defendants’ submissions proceeded on the unexpressed assumption that Jacquelyn had done so, otherwise Jacquelyn could not be found to have assented to the vesting of the 32 shares in the plaintiff.

Christine can be put to one side for present purposes, as there is no evidence that she engaged in any conduct at any time in relation to the 32 shares, or any other property in Kim’s estate, that might constitute acceptance by her of the office of executrix. She did not know of her appointment by Kim’s Will until after her father’s death in October 2003 and there is no evidence even now that she accepted or accepts the appointment.

Jacquelyn is another matter. She was told by her father that she was executrix of Kim’s Will. Although she did not understand what that meant, she performed acts in 1986 as executrix of Kim’s estate. Although she does not recall it, she signed the share transfer dated 23 December 1986. She may have performed other acts, like signing a transfer of shares from Kim to Kim’s estate, as the annual return of Edlyros purports to show the 32 shares were held, as at 30 June 1986, by Kim’s estate. But apart from that, her evidence is she did not know of the 32 shares held by Kim or what the role of executrix required. She plainly allowed her father to control the matters relating to Kim’s estate and to direct her in her role as executrix.

At common law, the office of executor is a single office, so that if more than one is appointed their authority is joint and several.[83] Each of them could bind the others by disposition of the assets, by assent to legacies and in other ways.[84] This includes an assent in relation to personal property disposed of in the way that Kim’s Will provides, assuming that ‘monies and possessions’ includes the choses in action constituted by the 32 shares in Edlyros.[85]
[83]Union Bank of Australia v Harrison (1910) 11 CLR 492, 499 (Griffith CJ), 508 (Barton J), 514 (Isaacs J), 525–6 (Higgins J).
[84]Ibid 499.
[85]There was an unstated assumption by the parties that ‘monies and possessions’ includes the shares, as no one contended to the contrary.

The facts set out earlier, although limited, point to Jacquelyn having accepted the office of executrix. The defendants have no doubt proceeded on the footing that a person in the position of Jacquelyn, knowing she is an executrix, having left the performance of the functions of her office to her father, and who has apparently signed whatever was put in front of her, cannot be heard to deny that she has accepted the office of executrix.

Assent

In Griffith’s Probate Law and Practice in Victoria an assent is described compendiously as follows:[86]

An assent is the legal method by which a personal representative indicates that he does not require particular property of a deceased person for the discharge of the liabilities of the estate, and that it may therefore pass to the beneficiaries. At common law the assent was a device peculiar to the executor and applicable only in respect of personal property. Section 36 of the Administration and Probate Act 1928 [re-enacted as s 41 of the Administration and Probate Act 1958] expressly gave the power to assent in relation to real property. At common law an administrator had no power to assent. There is still no power in an administrator to make an assent to pure personalty.

[86]RG de B Griffith, RA Sundberg (Law Book Co., 3rd ed. RA Sundberg 1983) 75.

It is thus an act by which an executor indicates that an asset is to vest in a beneficiary. It means that the executor no longer requires property of the testator to pay the debts, funeral expenses or general pecuniary legacies of the testator.[87] Whether or not an executor has assented is a question of fact. In respect of personal property, it may be done informally and may be inferred from the conduct of the executor.[88] In the words of Viscount Haldane in Attenborough v Solomon:

The office of executor remains, with its powers attached, but the property which he had originally in the chattels that devolved upon him, and over which these powers extended, does not necessarily remain. So soon as he has assented, and this he may do informally and the assent may be inferred from his conduct, the dispositions of the will become operative, and then the beneficiaries are vested in them the property in those chattels. The transfer is made not by the mere force of the assent of the executor, but by virtue of the dispositions of the will which have become operative because of the assent.[89]

[87]Kemp v Inland Revenue Commissioners [1905] 1 KB 581, 585.

[88]Attenborough v Solomon [1913] AC 76, 83; Inland Revenue Commissioners v Smith [1930] 1 KB 713, 733; Re Donkin (deceased) [1966] Qd R 96, 118.

[89]Attenborough v Solomon [1913] AC 76, 83.

Once an assent is given in respect of the personal property concerned, or the administration of the estate is complete, the executrix holds the assets as trustee for the beneficiaries, who may obtain an order for their transfer to them. Jacobs’ Law of Trusts in Australia[90] discusses the different roles of executor and trustee in this way:

The principal duties of an executor are to get in the assets of the deceased, to pay his debts, to pay the legacies given by the will, and to distribute the assets. If a testator appoints the same person his executor and his trustee, which is usual nowadays, then that person acts as executor when he performs executorial duties, and thereafter while he continues to hold the property he is a trustee thereof.

[90]JD Heydon and MJ Leeming (LexisNexis Butterworths, 8th ed, 2016) [2-40]; see also Monty Financial Services Ltd v Delmo [1996] 1 VR 65, 75–6; In the Will of Orloff [2010] 24 VR 603, [27]–[32];

Where there are no trusts declared by the will, as is the present case, then upon completion of the executorial duties of getting in the assets of the estate and paying the debts, duties and legacies, it is the executor’s duty to hand over the balance of the estate to the residuary legatees, in this case the plaintiff.[91] As a matter of general principle an executor is not, ipso facto, a trustee and the expression ‘personal representative’ does not include trustees.[92] When the administration is complete, however, the personal representative becomes a trustee of the net residue for the persons beneficially interested.[93] In Commissioner of Stamp Duties v Livingston, Lord Radcliffe put the position of the executor this way:[94]

There were special rules which long prevailed about the devolution of freehold land and its liability for the debts of a deceased, but subject to the working of these rules 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 of carrying out the functions and duties of administration, not for his own benefit; and these duties would be enforced upon him by the Court of Chancery, if application had to be made for that purpose by a creditor or beneficiary interested in the estate. Certainly, therefore, he was in a fiduciary position with regard to the assets that came to him in the right of his office, and for certain purposes and in some aspects he was treated by the Court as a trustee. “An executor”, said Kay J. in In re Marsden, “is personally liable in equity for all breaches of the ordinary trusts which in Courts of Equity are considered to arise from his office.” He is a trustee “in this sense”.

[91]See for example, In Re Hunter (deceased) [1932] NZLR 911, 932; Monty Financial Services Ltd v Delmo [1996] 1 VR 65, 75.

[92]Re Trollope’s Will Trusts [1927] I Ch 596; Re Spencer & Hauser’s Contract [1928] Ch 598; Williams, above n 57, [81–02] fn 8.

[93]Eaton v Daines [1894] WN 32; RE Ponder [1921] 2 Ch 59; Re Pitt (1928) 44 TLR 371; Williams , above n 57, [81-02] fn 14.

[94](1964) 112 CLR 14, 17.

Conversely, where an executrix continues to hold estate property for purposes which include the payment of the debts of the estate, the beneficiary entitled to the property under a will does not enjoy beneficial title to that property. The power to deal with assets in the administration of an estate remains until the executrix divests herself of the property in the asset or effectively changes the capacity in which it is vested in her. By assenting to a specific bequest of personal property she may vest it in the beneficiary entitled.[95]
[95]Burke v Dawes (1938) 59 CLR 1, 19 (Dixon J). But where the deceased has left assets on trust (which is not the case here) the position may be different because the trustee must do some act showing an unequivocal intention to separate it from the assets she has been administering as executrix and thereafter to hold it as trustee upon the trusts specifically declared by the provisions of the will. If so, she ceases to hold it as executrix.

The plaintiff submitted that there is insufficient evidence to show that the administration of the estate of Kim is complete. It was submitted that there is no evidence that Jacquelyn (or Christine) did anything to pay funeral expenses, to pay debts, to ascertain whether there were debts, or to advertise.

As I have said above at [72] Christine can be put to one side for present purposes, it is in relation to Jacquelyn alone that an assent may be inferred. The 32 shares were apparently transferred from Kim to Jacquelyn, as one of the executrices of her estate, before 30 June 1986. That is the inference to be drawn from the annual return filed on 31 December 1986, which related to the financial year ending 30 June 1986 and records 32 shares as held by ‘Estate of K.E. Simmons’.[96] The evidence thus shows that Edlyros did not require a grant of probate of Kim’s estate in order to be satisfied of the entitlement of Kim’s estate to hold the shares. The evidence is clear that from late 1986 to the time of the transfer of the 32 shares to Betty in 2008, the shares were either recorded as held by Kim’s estate or by Jacquelyn for the estate. There is no suggestion in the facts that there were any other duties of administration required of Jacquelyn after about 1986.
[96]Collins affidavit, NJC-2, 114.

Such facts as are revealed show that it was Lyle who managed the transfer of the shares in Edlyros from Kim to Kim’s estate and to Jacquelyn as executrix of that estate. Even though she knew she was executrix of Kim’s Will, Jacquelyn did not know of the whereabouts of the Will (or of the copy Will) or terms of it until much later. No doubt she trusted her father in these matters. The share transfer of 32 shares from Kim to Betty dated 23 December 1986 was not recorded in the Annual Returns for that year or any other year that Lyle was alive. The shares were consistently recorded as held during the period from 30 June 1986 to 2008 by Kim’s estate, either simpliciter or by Jacquelyn as her executrix or by Jacquelyn non-beneficially.

The very strong inference is that Lyle controlled Edlyros and maintained its records until he died in 2003. It is also a very strong inference that so far as the administration of Kim’s estate is concerned, it was ‘managed’ by Lyle with assistance from the plaintiff (in closing the business in Belmore Road, North Balwyn and no doubt doing other things) and with the co-operation of Jacquelyn (in signing whatever Lyle asked her to sign, for example the unregistered transfer of the 32 shares from Kim’s estate to Betty in December 1986).

It seems likely that there was no real property owned by Kim at her death that did not pass by survivorship to the plaintiff, for otherwise there must have been an application for a grant of representation. There is a dispute about Kim’s personal possessions (clothing and other personal items), but after this elapse of time nothing could turn on the administration in relation to them. They must have been dealt with in some way. Any debts of the estate must be statute barred. There has been no mention of any bank accounts, but it would seem likely that they either were held jointly with the plaintiff or were of modest amount. Thus the only known and presently existing property to be administered are the 32 shares.

The fact that the 32 shares were held in the name of the estate from late 1986 points to the conclusion that at some time after the end of the executor’s year up to 2008 when the shares were transferred to Betty, there was an assent to the vesting of the shares in the plaintiff as the residuary legatee under Kim’s Will.

An issue that the defendant’s addressed only briefly in their submissions was whether there could be an assent by an executrix who did not know the duties of her office or of the existence of the 32 shares the subject of the inferred assent. In substance, as I understood it, it was submitted that it was irrelevant whether she was conscious that she had discharged her office or not.[97] She had plainly known that she was executrix of Kim’s Will. The 32 shares were recorded in the records of the Edlyros as held by her. Whether she knew it or not, the shares were vested in her, and must have vested by inferred assent. The authors of Wills Probate and Administration Service Victoria make the general statement, after referring to Attenborough v Solomon:

Therefore, it appears that the change from personal representative to trustee occurs when the estate is in a position where the personal representative is able to identify which assets can be distributed. This will obviously occur when the debts have been paid or allowed for and the will is incapable of being challenged pursuant to s 91 of the APA 1958.[98]

[97]T36.

[98]Above n 68 [46,015].

The fact that to the best of her memory, it was not until in about late 2003 or 2004 that Jacquelyn became aware of the Will and the existence of the shares is not to the point. It seems pretty plain that had she attended to the terms of the Will she would have appreciated that the administration of Kim’s estate was complete and she held the 32 shares as trustee for the person beneficially entitled under Kim’s Will. On the assumption that the Will is provable and that no other person has a better beneficial entitlement to the shares (and that is the assumption upon which the defendants are proceeding) the beneficial entitlement to the shares, as the only known property remaining in Kim’s estate, must have been the subject of an assent vesting the beneficial interest in them in the plaintiff at some time after the end of the executor’s year and well before September 2002.

In my view, the defendants are correct in their submission that the proper inference to be drawn from the circumstances I have described above is that Jacquelyn, as one of Kim’s executrices, had assented to the dispositions in the Will by 27 September 2002.[99] She knew of her position as executrix and should have known, had she enquired or insisted, of the terms of the Will. That she left the day to day conduct of the affairs of administration to her father does not prevent the Court drawing the inference that through her conduct and acquiescence in the actions of Lyle on her behalf the only known asset of Kim’s estate was the subject of her assent to vesting in the plaintiff.
[99]15 years and one day before the commencement of the proceeding.

The law is clear, as set out above, that an assent may occur informally and may be inferred from circumstances.[100] A long period has followed the initial share transfer from Kim to Jacquelyn as her executrix and during that time there is no evidence that any executorial functions were performed. That strengthens the conclusion that an assent has taken place.[101]
[100]Attenborough v Solomon [1913] AC 76, 83 (Viscount Haldane LC).
[101]Ibid.

I also accept the submission of the defendants that following the assent by Jacquelyn, the plaintiff’s inchoate right to due administration was transformed into a complete and perfect entitlement to the Edlyros shares. Where the estate’s assets have been got in within a year of death, the accrual of a beneficiary’s right to receive the share or interest in the estate occurs on the expiration of the executor’s year.[102]
[102]In re Johnson; Sly v Blake (1885) 29 Ch D 964, 970–971 per Chitty J; Ministry of Health v Simpson [1951] AC 251, 277 (Lord Simonds); A&P Act 1958 s 49.

In In re Johnson, Sly v Blake[103] Chitty J had before him a claim that was said to be barred by s 40 of the Real Property Limitation Act 1833. Whether that Act barred the particular claim (a claim for general administration of the personal estate of an intestate and an account of the personal estate coming into the intestate estate) turned on when the plaintiff’s ‘present right to receive’ certain assets had accrued. Chitty J said:

The second question turns on the meaning of the words ‘present right to receive the same’. The intestate Johnson died in 1848, and the Defendants contend that the Plaintiff’s right was barred at the end of twenty years from his death, or at all events of twenty-one years, the additional year being conceded in conformity with the general rule that an executor or administrator is allowed in an administration case one year to complete the administration of the estate. In the absence of special circumstances relating to the getting in of an intestate’s estate, I think that the latter contention is correct, and that the plaintiff’s claim for general administration of the intestate’s estate is barred….
But I am of the opinion that the claims of the Plaintiff in her own right and as administratrix of her deceased sister are not barred in reference to such of the assets as came into the possession of TC Johnson the administrator, within twenty years before 11^th of April 1883, the day on which the writ was issued.

[103](1885) 29 Ch D 964, 970–971.

The judgment of Chitty J in In re Johnson makes clear that even though in relation to certain assets, the administration of the estate is complete, if other assets later fall into the estate the right to receive those assets accrues only when the personal representative’s title to the assets is perfected and the costs incurred in getting them in are paid or otherwise dealt with.

In the decision of the House of Lords in Ministry of Health v Simpson,[104] Lord Simonds said, in relation to the limitation period running from the date when ‘the right to receive the share…accrued’, that:

There is nothing inappropriate in a legatee or next of kin who has brought no action for twelve years[105] after the executor’s year has expired being barred from such action whether against the executor himself or against the person to whom the executor has made a wrongful payment.

[104][1951] AC 251.

[105]The relevant limitation period in the UK Limitation Act 1939, s 20.

In the more modern case of In Re Loftus,[106] referred to by the plaintiff, the Court of Appeal had to consider, in part, the UK equivalent of s 22 of the LAA.[107] Lord Chadwick, with whom Thomas and Lloyd LJJ agreed, observed that the better view is that the period under s 22 will not begin to run until –

…the administrator has paid the costs, funeral and testamentary and administration expenses, debts and other liabilities properly payable out of the assets in his hands, and provided for the payment of any pecuniary legacies. It is not until then that he is in apposition to distribute the residuary estate to those entitled …

[106][2001] 1 WLR 591 (CA).

[107]Limitation Act 1908, s 22.

That was a case concerning an intestate estate and the Court considered that because the title of the administrator depended on the grant the time would not run until the administrator was in a position to distribute the residuary estate, usually at the end of the executors year after a grant of administration. Assuming that Kim’s Will is proved by Jacquelyn, that case is distinguishable from this case as it involved an intestate estate where the administrator’s title depends on a grant.

The plaintiff says that to calculate the limitation period from the end of the executor’s year is too simplistic. All the cases dealing with the question when the limitation period starts to run are cases where there had been a grant of representation, here that has not occurred. In essence, the plaintiff’s submission is reduced to the proposition that there can be no administration of an estate until there has been a grant, and that the only right of a beneficiary of an unadministered estate is to compel due administration of it, to have their interest paid to them once ascertained and to seek distribution of their share after the end of the executor’s year.

This is contrary to the following established law:

(a) that the executor’s title is derived from the will of the deceased and not from the grant of probate;

(b) that a grant of probate is not essential to the existence of the office of executor; and

(c) that it is not necessary to obtain a grant in order to administer and deal with the assets of the estate where proof of title is not required.

The plaintiff also points to ss 41 and 49 of the A&P Act, as indicating that there can be no assent to the vesting of the 32 shares until after a grant of probate. Section 41 deals with the effect of assent or conveyance by a personal representative. In part it provides:

(1)A personal representative may assent to the vesting in any person who … is entitled thereto either beneficially or as a trustee or personal representative of any estate or interest in real estate (including chattels real) to which the testator or intestate was entitled …

At common law the assent was a devise peculiar to an executor of personal property. This section (derived from s 36 of the Administration and Probate Act 1928 (Vic), which was, in turn derived from the English Administration of Estates Act 1925) extended the previous common law power vested in executors to assent to the transmission of personal property, to administrators and to dealings with real property. It does not remove the common law power to assent in the case of personal property, although it alters it in manner and form. It does not bring with it, in my view, some bar to an executor assenting before obtaining a grant of probate, which is what I apprehend is the burden of the plaintiff’s argument.

Section 49 provides that:

Subject to the foregoing provisions of this Act, a personal representative is not bound to distribute the estate of the deceased before the expiration of one year from the death.

The plaintiff submitted that the definition of ‘personal representative’ in both ss 41 and 49 must refer to the person to whom a grant of representation was made. Thus, the executors year only applies where there has been a grant of representation.

The definition of ‘personal representative’ is in s 5 of the A&P Act and is as follows:

In this Part and Part IA, unless inconsistent with the context or subject matter – personal representative means the executor original or by representation or administrator for the time being of a deceased person.[108]

[108]Section 5 is in Part I of the Act, entitled General- ss 5 to 70. Part IA deals with intestacy.

The plaintiff submitted in support of this submission that the terms of s 17 of the A&P Act show that a personal representative who is an executor can only be such within the meaning of the Act if a grant of probate is made. By s 17, an executor of a sole or last surviving proving executor of a testator is the executor of that testator. The other parts of the section make clear that an executor by representation must have proved his testator’s will and that any chain of representation is broken by an intestacy or a failure of an executor to obtain probate of a will.

On the other hand, there are other provisions of the A&P Act that refer to a personal representative or an executor and show that the use of either term is not intended by itself to indicate that a grant of representation had been made:

(a) section 24(1) provides if ‘at the expiration of twelve months from the death of a person any personal representative of the deceased to whom a grant has been made is residing out of the jurisdiction of the Court…’.[109] The defined expression is thus qualified by the necessity that a grant has been made to the ‘personal representative’;

(b) in s 15 the reference to an executor clearly means one that has not proved;

(c) section 34 is an instance where the provision only applies where the executor has been granted probate.

[109]Emphasis added.

No doubt the examples could be magnified by trawling through the A&P Act. The point is, however, that the reference to personal representative or an executor does not necessarily mean a person to whom a grant of probate has been made. It turns on the context whether this is so.

The fact that the plaintiff could not establish his entitlement under Kim’s Will without proving the Will does not, in my opinion, affect the existence of the entitlement. An application of the kind now made for the executors to prove or renounce the Will could have been made within the limitation period and, if the Will were proved, could have resulted in a grant of probate to Jacquelyn, and the establishment of the right given to the plaintiff under it.

If Kim’s Will is provable, the plaintiff’s cause of action to recover the 32 shares, or their value, accrued more than 15 years before the commencement of this proceeding, at some time between 1 January 1987 and 26 September 2017.

I also agree with the defendants’ submission that:

(a) there is no substance in the plaintiff’s contention that Jacquelyn was not a personal representative of Kim’s estate and that the plaintiff could not compel his interest in the estate to be distributed to him. The expression 'personal representative' includes an executor, whether he or she has proved the will or not;[110]

(b) that the plaintiff’s alternative contention that s 22 of the LAA operated to extend the time for action to be brought to recover part of an estate which has been wrongly taken by a third party is misconceived and contrary to the decision in In re Diplock.[111] It is illogical that a beneficiary’s right to receive personal property accrues on its misapplication. A right to receive the personal estate of the deceased arises when the beneficiary has a right to demand it. That right is not conditioned on any subsequent misapplication by the executor.

[110]Re Crowhurst Park, Sims-Hilditch v Simmons [1974] 1 WLR 583, 593–594 (Goulding J).

[111][1948] Ch 465, affirmed Ministry of Health v Simpson [1951] AC 251.

Section 21(1) of the LAA

So far as presently relevant, s 21 of the LAA provides:

21 Limitation of actions in respect of trust property
(1)No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action—
(a)in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or
(b)to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use.

The terms ‘trust’ and ‘trustee’ are defined in s 3(1) of the Act as having ‘the same meaning respectively as in the Trustee Act 1958’. By the Trustee Act, the expressions ‘trust’ and ‘trustee’ extend to implied and constructive trusts and to cases where the trustee has a beneficial interest in the trust property, and to the duties incident to the office of a personal representative.[112]
[112]Section 3(1).

There is no doubt that the reference in s 21(1)(a) to ‘fraud’ or ‘fraudulent breach of trust’ involves dishonesty or a consciousness that what was being done was wrong.[113] There is no allegation of any fraud, involving dishonesty or a consciousness that what was being done was wrong, in the OM or in the affidavits in support of the application. There is also no suggestion that the existence of the shares was dishonestly concealed. For this reason reliance on s 21(1)(a) of the LAA is not available, and I accept the defendant’s submission, assuming Kim’s Will is proved, that s 21(1)(a) does not qualify the operation of s 22 of the LAA in this case. I did not understand the plaintiff to contend otherwise.
[113]Banque Commerciale SA v Akhil Holdings (1990) 169 CLR 279, 286 (Mason CJ and Gaudron J). Armitage v Nurse [1998] Ch 241 (CA) 260-261 (Millett LJ); JD Heydon, MJ Leeming, Jacobs‘ Law of Trusts in Australia (LexisNexis Butterworths, 8th ed, 2016) [22]–[26].

I agree with the defendants submission that s 21(1)(b) of the LAA contemplates a pre-existing trust under which the claimant is a beneficiary and a claim for the recovery of trust property already subjected to a trust from a person who is already a trustee of that trust property.[114] If the distinction between a remedial and institutional trust is a valid one, which for the reasons given by Tate JA in McNab v Graham it is not,[115] in this case any trust arose, as I have said, at the end of the administration of the estate which by inference was at the end of the executor’s year and ended in 2008 when Jacquelyn transferred the 32 estate shares to Betty.
[114]Nolan v Nolan [2004] VSCA 109 [63].
[115][2017] VSCA 352 [115]–[124].

There can be no claim against Jacquelyn because s 21(1)(b) ceased to apply to her following the 2008 transfer: Jacquelyn no longer held the shares; nor had she converted them to her own use. There can be no claim against Betty because she never assumed to hold the shares in trust for Kim’s estate. There can be no claim against Jacquelyn, Christine and Shona, as executrices of Betty’s will and as beneficiaries under it, because in their capacity as executrices of Betty’s will and residuary beneficiaries of her estate, they did not assume to hold the shares on trust for Kim’s estate.

Conclusion

In these circumstances, this is not an appropriate case to summarily dismiss the plaintiff’s claim, even though on the footing that the Will is proved and Jacquelyn appointed executrix, on the arguments addressed above, the plaintiff’s claim to the 32 shares is statute barred.

The defendants’ summons filed on 8 March 2018 will be dismissed. I will hear the parties as to the costs of the application if there is any dispute.

SCHEDULE OF PARTIES

S CI 2017 03921

PETER SIMMONS Plaintiff

- and -

JACQUELINE ANNE ROSS (as executor of the estate of Kimlarn Elizabeth Simmons) First Defendant

JACQUELINE ANNE ROSS, CHRISTINE HELEN DEVESON and SHONA MEREDITH MESSER (as executors of the estate of Elizabeth Ross) Second Defendant

JACQUELINE ANNE ROSS (in her personal capacity) Third Defendant

CHRISTINE HELEN DEVESON (in her personal capacity) Fourth Defendant

SHONA MEREDITH MESSER (in her personal capacity) Fifth Defendant

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Citations

Simmons v Ross [2018] VSC 306

Most Recent Citation

Clementi v Rossi [2019] VSC 725

Cases Citing This Decision

8

Hitchcock v Pratt Group Holdings Pty Ltd as trustee for the Pratt Family Holdings Trust [2024] NSWSC 1292

Serwin v Dolso [2020] NSWSC 370

Re Banning; Ex Parte Banning [2018] WASC 313

Cases Cited

11

Statutory Material Cited

0

Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd [1990] HCA 11

Nolan v Nolan [2004] VSCA 109

PETER SIMMONS	Plaintiff
- and -
JACQUELINE ANNE ROSS (as executor of the estate of Kimlarn Elizabeth Simmons)	First Defendant
JACQUELINE ANNE ROSS, CHRISTINE HELEN DEVESON and SHONA MEREDITH MESSER (as executors of the estate of Elizabeth Ross)	Second Defendant
JACQUELINE ANNE ROSS (in her personal capacity)	Third Defendant
CHRISTINE HELEN DEVESON (in her personal capacity)	Fourth Defendant
SHONA MEREDITH MESSER (in her personal capacity)	Fifth Defendant

[2018] VSC 306

8 June 2018