Bird v Perpetual Executors and Trustees Association of Australia Limited [1946] HCA 52

[64]

It is necessary in each case to determine what was the object of the document. If its sole object is to create the acknowledgment, a covenant to pay would be readily inferred from the document (Marryat v. Marryat (3)). U there is nothing in the document except the acknowledgment the document would generally amount to a covenant to pay. In the present case the deed contains the acknowledgment and the mandate to Parker's personal repre- sentatives. The presence of other provisions in a deed besides an acknowledgment may show that the sole object of the deed is not to create the acknowledgment, but that the deed has another object. Then the admission may be only collateral to the object of the deed. In Courtney v. Taylor (4) there was a deed containing an admission of the debt claimed but the Court inferred from other provisions of the deed that it was not intended to create a fresh covenant to pay ; and that "the acknowledgment may very well have been made diverso intwitu." In Marryat v. Marryat (5) the Master of the Rolls (Sir John Romilly) explained the principle in this way : " In Courtney v. Taylor (6) there was an acknowledgment of the debt, exactly in the words here used, not merely a statement of the amount of the debt which ' was still due' and owing, but as Robert Taylor ' doth hereby acknowledge,' the same recital as here. The question is, what is the effect of that ? It is admitted that if the sole object of the deed be to create an acknowledgment of the debt, then it does not matter in what terms that is expressed, and a covenant will be implied ; but if the deed has another object, then a covenant will not be implied from that acknowledgment. If, therefore, this deed had simply gone on to say, 'that it is hereby witnessed that the said sum of £4,441 is due from Marryat to Hallett which he Marryat doth hereby acknowledge and admit,' and had ended there, the Court would have implied a covenant to pay, and the deed would have created a specialty debt. But this deed does not end there ; on the contrary, it previously recites Marryat's interest under the will, and then it proceeds to recite the amount of the debt due, and to assign over to

[86]

The crucial question is whether the document was only intended to have a future operation after Parker's death, and therefore to be testamentary in character and inoperative unless duly executed and proved as a will. A covenant by a person that his personal repre- sentatives will pay a sum of money to another person upon or at some time after his death is a valid covenant (Boughton v. Boughton (1); Fletcher v. Fletcher (2); Jeffries v. Alexander (3); In re Maryon-Wilson ; Wilson v. Maryon-Wilson (4); Hay v. Commis- sioner of Stamps (5)). The present document does not contain the word " covenant" ; it directs the personal representatives of Parker to calculate and pay a sum of money to the plaintiff on Parker's death ; but any words in a deed which show an agreement to do a thing make a covenant (Norton on Deeds, 2nd ed., p. 532.) It was submitted for the appellant that a covenant that the personal representatives would pay this sum must be implied from the language of the document as a whole. On the other hand, it was submitted for the respondent that the document must be read literally, that the direction to pay was not intended to be a covenant but a revocable mandate, that the document had an ambulatory operation and was intended to confer a bounty on the plaintiff in the nature of a legacy, and could not be valid as a deed because it was not intended to be consummated until Parker's death in the sense that until then no conclusive and irrevocable effect could be given to it (Fletcher v. Fletcher (6); In re Carile; Dakin v. Trustees Executors and Agency Co. Ltd. (7); cf. In re Williams ; Williams v. Ball (8).) In Isaacson v. Harwood (9), Lord Cairns said : - * Now it is well settled that there is no magic in the words of a covenant. What- ever words are used by a party to a deed, if he intends that they shall operate as a covenant, he will be held liable. In the simple case of a debtor acknowledging a debt by a deed under seal, without any other object declared by the deed, no doubt it must be assumed that, although no words of covenant are used, the debtor meant to be

[89]

The document of 7th December 1938 contains an acknowledgment that Parker was indebted for the board and residence of himself and his wife at the rate mentioned from 12th March 1929 to the date of the document, and the learned trial judge thought that if the document was intended to have an immediate operation as a deed the plaintiff could have sued immediately on the acknowledgment of debt up to the date of the document if she had known of its existence. I agree that this would have been contrary to Parker's intention, but Ido not see how the plaintiff could have sued upon the acknowledgment as an implied covenant to pay the debt except in the manner pre- scribed by the document, that is to say, as an admission of a debt debitum in praesenti solvendum in futuro. There was no contract between Parker and the plaintiff to pay her for the board and resi- dence of himself and his wife, so that the elevation of what would otherwise have been a mere moral obligation into an acknowledged debt throws considerable light upon the legal effect intended to be given to the direction for payment. This is a direction to pay, not the amount of the existing indebtedness, but this amount plus a further amount calculated at the same rate to accrue due for the future board and residence of Parker and his wife. The document also directs that interest be paid "on the amount owing each suc- cessive year from March 1929," so that payments in respect of the period after the date of execution of the document are to be treated as included within an "' amount owing." Thus the direction to pay was plainly intended to create an obligation having the same legal effect with respect to the sums to accrue due as with respect to the sums which had already accrued due in the past. As the amount accrued due for services rendered to 7th December 1938 was acknow- ledged to be a debt, it necessarily follows that Parker must: have intended that the sums to accrue due from week to week for the same services to be rendered from week to week in the future should also create an indebtedness. The acknowledgment of the amount accrued due to the date of the document is in express terms an admission of a present indebtedness which could only be effective if the document was intended to have an immediate operation. A deed cannot be delivered in escrow upon the condition or contingency that it is only to become effective upon the death of the grantor (Foundling Hospital (Governors and Guardians) v. Crane (1) ; Carile's

Bird v Perpetual Executors and Trustees Association of Australia Limited [1946] HCA 52 - HCA 1946 case summary — Zoe

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Judgment (100 paragraphs)

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