Brown v New South Wales Trustee and Guardian [2012] NSWCA 431 | Case summary

Estoppel or Acquiescence 73The pleaded defence of the First Respondent raised as a defence estoppel or acquiescence arising from the letter of 29 September 2003. However, the case was conducted both below and on the appeal on the basis that a wider range of conduct than that letter was relied upon as the basis for defeating any trust that might otherwise exist. When there was no realistic prospect of obtaining any additional evidence concerning any of those matters, beyond that which had been put before the court, Mr Ash was right to adopt that course. The Judgment Below 74The primary judge did not give separate consideration to the separate equitable doctrines that were relied on in defence. He quoted the remarks of Lindley LJ in Allcard v Skinner (1887) 36 ChD 145 at 189: "Whether the plaintiff's conduct amounts in point of law to acquiescence or laches, or whether it amounts to an election not to avoid a voidable transaction, or whether it amounts to a ratification or a confirmation of her gifts, are questions of mere words which it is needless to discuss. In my judgment it would not be fair or right to the defendant to compel her now to restore the money sought to be recovered by this appeal. Nor, in my opinion, would such a result be in conformity with sound common legal or equitable principles." 75The primary judge made findings concerning the facts that he held gave rise to an equitable defence: "The evidence establishes no attempt to impugn the transaction for just on ten years from its inception. But there is much more than that. There is, in the 10 December 2002 document, a disavowal, on the part of Ian, of any financial interest in John's estate. There is evidence of a deliberate decision not to take steps to impugn the transaction, notwithstanding knowledge that there might be an entitlement to do so, in the letter of 29 September 2003 and (specifically in relation to the share transaction) in the file note of 6 March 2006." ... While Ian and his attorney made no claim for a decade, various detriments were incurred, and parties conducted their affairs, on the basis that the transaction was a valid one. John was disqualified from receipt of various pensions and entitlements, because of the assets which he apparently owned. His de facto spouse's property claim was settled by a payment which almost certainly could not have been made had John not owned the assets comprised by the house and the share portfolio. Ian made the December 2002 will exclusively in favour of Felicity, without any provision for John, a course which it is most unlikely he would have taken had he not been of the view that he had already made substantial provision for his son. Ultimately, John died, depriving his estate of any evidence that he could have given in answer to the claim." 76Mr Ash submitted that there were two distinct reasons why the judge was incorrect in holding that there was a total equitable defence. The first is that, even if it were open to the First Defendant to assert any equitable defences that John could have relied on in his lifetime, even in his lifetime John would not have had a complete equitable defence to a claim to enforce the trust. The second is that it is not open to the First Respondent to assert any equitable defence that John could have asserted in his lifetime. Estoppel Available as a Defence to John? 77Mr Ash submitted that the letter of 29 September 2003 should be understood by paying close attention to the reasons that were given in its sixth paragraph (those reasons being italicised by the primary judge). Ian's lack of memory, concern about his own health, and affection for his son provide, Mr Ash submits, no basis for treating that letter as anything other than a statement that Ian personally would not bring an action against John. It left open the possibility, Mr Ash submits, of a claim being brought by Ian's executor after John's death. 78In my view, that is not the message that an ordinary user of English would derive from the letter. The letter identified two areas of concern that Calvert Smith had, and the true beneficial ownership of the house was not one of them. Indeed, the letter specifically suggested that John sell the house, buy a cheaper property, and use the remaining proceeds of sale for his living expenses. Consuming part of the capital of the house in that way would be inconsistent with a claim later being brought that the house was held on trust for Ian. It would also be inconsistent with Ian's statement in December 2002 that he had "no financial interest in the matter" - if he was reserving the right for his estate to claim an interest after John's death he would have an interest in the nature of a reversion. Further, if any claim were to be brought after the death of John that might, as things appeared to be in September 2003, be many years into the future - John was aged only forty eight when he died, there is no trace in the evidence of anyone expressing a concern about John's possible premature death. There is no plausible reason why Ian would want to reserve, for his estate, an interest that might fall into possession such a long time into the future. Particularly is that so when Mr Ash accepts that John would be free to consume as much of the capital of the Mosman house as he needed, so that it was quite indeterminate what the reserved interest would be 79Ian's conduct from December 2002 amounted, in my view, to a representation that he was making no claim to an interest in the house. That is the sort of representation concerning his own proprietary rights that is capable of giving rise to a proprietary estoppel. The hearing of the Guardianship Tribunal in December 2002 was an occasion that called for Ian or the Appellant to make known any claim that they had concerning John's property, as the Tribunal would make its orders, and if a financial management order was made would thereafter administer John's estate, taking into account what it understood to be John's property. Ian's application to be joined specifically said he had no such financial interest. Mr Burt attended the hearing on Ian's behalf, and put forward no claim concerning the house. I would infer that by the time of John's death he (or the Commissioner on his behalf) had organised his life for many years on the basis that the Mosman house was his. He had paid all the outgoings; had not sold the house and moved into cheaper accommodation but rather had chosen to use his other assets to live on; had settled the claim brought by Ms McLellan (inevitably on the basis that took into account what assets he regarded himself as owning and any contribution she had made towards those assets); and paid the English capital gains tax bill (itself calculated by reference to the amount of inter vivos gifts Ian had given him). 80Mr Ash submits that even if any estoppel that is now available to the First Respondent depended upon any detriment that John had suffered (as Mr Ash submits it does not) the level of the detriment is insufficient to defeat the claim. He points, by way of example, to the limited monetary amounts involved in settling Ms McLellan's claim, and paying the English capital gains tax. I do not agree. The acts that were done on the basis of John's understanding that the house was his operate to create an equity which bound Ian to make good John's expectation: Giumelli v Giumelli (1999) 196 CLR 101 at [35]-[36]; Delaforce v Simpson-Cook [2010] NSWCA 84 at [3]-[4], [63]-[72]. As I said in Waddell v Waddell [2012] NSWCA 214 at [54], with the agreement of Allsop P and Sackville AJA: "There is the authority of Lord Walker in Thorner v Major [2009] UKHL 18; (2009) 1 WLR 776 at [57], Lord Neuberger in Thorner at [101], Hoffmann LJ in Walton v Walton [1994] (Court of Appeal of England and Wales, 14 April 1994, unreported) and this Court in Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483 at [81] and Evans v Evans [2011] NSWCA 92 at [108] for the proposition that: '... equitable estoppel [by contrast with contract] ... does not look forward into the future [it] looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept.'" 81The judge was right to take into account not only matters of reliance by John, but also the fact that Ian had made the 2002 Will exclusively in favour of the Appellant without any provision for John. The 2002 Will was made on 19 December, less than a fortnight after Ian had told the Guardianship Tribunal that he had no financial interest in seeking to be represented there, wanted to secure John's assets, and wanted to ensure that John's best interests were protected. The affectionate and caring terms in which Ian's attitude to John was expressed in Calvert Smith's letter of 29 September 2003 leave no room for hypothesising that John was not a beneficiary under Ian's will because Ian had had a rift from him, or had ceased to want to provide for him. The only reasonable inference is that John was excluded from Ian's will because Ian was of the view that he had already provided for him, in the form of the shares and the house proceeds. The circumstances in which Ian made the will he did are matters that, looking backwards from just before John died, assist in reaching the conclusion that it would be unconscionable for Ian's executor to go back on the representation that the Mosman house was entirely John's. By a time immediately before John's death, the course of John's life had come to be set on the basis that the Mosman house was his, in a way that could not be unscrambled. If the matter were being determined just before John died, John would have had a total defence to any attempt by Ian to enforce the trust that once existed. No Entitlement for First Respondent to Assert Equitable Defence Because No Grant When Litigation Began? 82Mr Ash submits that the First Respondent cannot assert an equitable defence that John could have asserted in his lifetime because, at the time the Appellant began the litigation the First Respondent had no grant of administration, and had only the limited role of a repository of title pursuant to s 61 P & A Act. 83Section 61 P & A Act at the time of John's death provided: "From and after the decease of any person dying testate or intestate, and until probate, or administration, or an order to collect is granted in respect of the deceased person's estate, the real and personal estate of such deceased person shall be deemed to be vested in the Public Trustee in the same manner and to the same extent as aforetime the personal estate and effects vested in the Ordinary in England." 84The NSW Trustee and Guardian Act 2009 ("NSW Trustee Act") commenced on 1 July 2009. Section 4 NSW Trustee Act repealed the Public Trustee Act 1913. Section 5 constituted the corporation called the NSW Trustee and Guardian ("NSW Trustee"), which is the First Respondent in this appeal, and was the first defendant in the court below. Under clause 3(1)(d) of Schedule 1 to that Act, any reference in a previous Act to the Public Trustee is to be read as a reference to the NSW Trustee. Under clause 11 of Schedule 1 of the NSW Trustee Act, the NSW Trustee was taken for all purposes to be a continuation of the former Public Trustee. Thus, from 1 July 2009, John's rights concerning the Mosman property were vested in the First Respondent pursuant to s 61 P & A Act. That was still the situation when the Appellant began the litigation in September 2010. 85Mr Ash has reminded us that in Andrews v Hogan (1952) 86 CLR 223 at 233 Dixon CJ contemplated (but did not decide) the possibility that even though the Public Trustee could be served with a notice to quit leased real estate that was deemed to be vested in him under s 61, "as a mere repository of the estate" the Public Trustee did not have the capacity to appear in and defend an action. Fullagar J, at 250-251, thought it "may very well be that he has no active duties". 86Any discussion of the extent of the powers of the Public Trustee or the NSW Trustee under s 61 P & A Act, would need to take into account the discussion in Dyke v Walford (1846) 5 Moore PC 434; 13 ER 557 of the role that the Ordinary played in administration of intestate estates in England. However, in my view it is not necessary to ascertain the scope of the powers and authorities of the Public Trustee, or the NSW Trustee, under s 61. What mattered, by the time the hearing below occurred and the judgment appealed against was given, was that by then there had been a grant of letters of administration. The question for the primary judge to determine was whether the Mosman land (or its proceeds of sale) were subject to the trust for which the Appellant contended. That is a question that was to be determined as at the date that the primary judge gave judgment, not as at the date that the statement of claim was filed: Application des Gaz SA v Falks Veritas Ltd [1974] 1 Ch 381 at 392, 399, 400. 87Section 44(1) P & A Act as at the date of the grant provided: "Upon the grant of ... administration of the estate of any person dying after the passing of this Act, all real and personal estate which any such person dies seised or possessed of or entitled to in New South Wales, shall as from the death of such person pass to and become vested in the ... administrator for all the person's estate and interest therein in the manner following, that is to say: ... (b) On intestacy in the administrator. ..." 88In other words, once the letters of administration were granted, the title of the First Respondent to the Mosman property related back to the time of John's death. An administrator of a deceased estate is a privy of the deceased, and can assert any estoppel that the deceased could have asserted: Partridge v McIntosh & Sons (1933) 49 CLR 453 at 463; Williams, Mortimer and Sunnucks, Executors, Administrators and Probate, 17th ed (1993) Sweet & Maxwell at 892; Spencer Bower and Handley, Res Judicata, 4th ed (2009) LexisNexis [9.38]; Young, Croft & Smith, On Equity (2009) Thomson Reuters [12.120]. Thus there was no bar, by virtue of not having had a grant at the time the litigation began, to the First Respondent asserting whatever equitable defences John could have asserted. No Entitlement for First Respondent to Assert Equitable Defence Because Crown Will Take as Bona Vacantia? 89Alternatively, Mr Ash submits that the fact that Crown will take John's net estate as bona vacantia has the effect that the First Respondent cannot assert an equitable defence that would have been open to John in his lifetime. At the time of John's death, distribution of intestate estates occurred under s 61B P & A Act. Section 61B(1) provided: "Where a person dies wholly intestate, the real and personal estate of that person shall, subject to the payment of all such funeral and administration expenses, debts and other liabilities as are properly payable out of the estate, be distributed or held in trust in the manner specified in this section, and the real estate of that person shall be held as if it had been devised to the persons for whom it is held in trust under this section." 90Sections 61B(2)-(6) set out various types of beneficiaries to whom the estate was to be distributed, in various different contingencies depending upon whether the intestate left a spouse, or left particular types of relative. None of ss 61B(2)-(6) applied to John. Section 61B(7) provided: "In default of any person taking an interest under subsections (2) to (6), the estate shall belong to the Crown as bona vacantia, and in place of any right to escheat." 91Mr Ash points out, uncontroversially, that "estoppel ... is only a personal matter, between the particular parties": Partridge v McIntosh & Sons Ltd at 462 per Starke J. He accepts that estoppel can bind a privy or a successor in title of someone who could assert the estoppel. However, he submits that that when the Crown obtains property of an intestate as bona vacantia the Crown does not take as a privy or successor in title. He submits that, if the Crown had become the registered proprietor of the land as a consequence of the administration of the estate being completed, or had received the net proceeds of the estate if the Mosman house had been sold in the course of administration (as is in fact the case) and Appellant laid claim to those assets, the Crown would not be able to assert any estoppel that John could have asserted in his lifetime. He submits that the First Respondent could not be in any better position. 92At the outset, I reject the submission that whether First Respondent can assert any equitable defences that were open to John depends upon whether, once administration of the estate is complete and any net proceeds have been transferred to the Crown, the Crown would also be able to assert those defences. The Appellant has sued the First Respondent, and her entitlements are to be decided by reference to the defences that the First Respondent can assert. 93In any event, though, I do not accept that, even if the Mosman property, or the fund representing its proceeds, were to be transferred to the Crown, it would not be possible for the Crown to defend any claim that it held that property on trust for the Appellant by relying on the estoppel that was open to John. Explaining why that is so requires some consideration of how the Crown acquires its title to property of an intestate who dies without a spouse or next of kin. 94Under the common law, the right of the Crown to receive personalty that was bona vacantia was an aspect of the Royal prerogative. It depended upon the property in question being ownerless: In the estate of Musurus, deceased [1936] 2 All ER 1666 at 1668; In re Usines de Melle and Firmin Boinot's Patent (1954) 91 CLR 42 at 48-9 per Fullagar J; British General Insurance Co Ltd v AG [1945] LJCCR 113 at 121 per Judge Wethered; Re Wells, Swinburne-Hanham v Howard [1933] Ch 29 at 55 per Romer LJ. 95In Dyke v Walford, the Right Hon T Pemberton Leigh, (later Lord Kingsdown), delivering the advice of the Privy Council spoke, at 495-496, 580 of: "the right of the Crown to 'bona vacantia;' to property which has no other owner". He said, at 496, 580 that that right "was vested in the Crown, as one of its 'jura regalia,'". He also said, at 498, 581: "... the right to goods belonging to persons dying intestate, without leaving husband, or widow, and without kindred, was vested in the King, in right of His Crown". 96In Attorney General of Ontario v Mercer (1883) 8 AC 767, Lord Selborne said, as a considered dictum in the speech in a Privy Council appeal from Canada that concerned whether revenues arising from escheat accrued to the Dominion government or the government of the Province in which the land was located: "The subject was discussed, with much fullness of learning, in Dyke v Walford 5 Moore, PC 434, where a Crown grant of jura regalia, belonging to the county palatine of Lancaster, was held to pass the right to bona vacantia. 'That it is a jus' (said Mr. Ellis, in his able argument, ibid, p. 480), 'is indisputable; it must also be regale; for the Crown holds it generally through England by Royal prerogative, and it goes to the successor of the Crown, not to the heir or personal representative of the Sovereign. It stands on the same footing as the right to escheats, to the land between high and low water mark, to felons' goods, to treasure trove, and other analogous rights.' With this statement of the law their Lordships agree, and they consider it to have been, in substance, affirmed by the judgment of Her Majesty in Council in that case." 97That the Crown does not take bona vacantia, under the general law, by way of succession is illustrated by two cases upon which Mr Ash relied. 98In re Barnett's Trusts [1902] 1 Ch 847 concerned a legacy given under the will of an Englishman to two life annuitants, and then to an Austrian resident. The Austrian predeceased the last of the life annuitants, and died intestate and with no spouse or relative to whom his estate might pass under Austrian law. The fund in question was located in England. The case was decided on the basis that the Austrian legatee was domiciled in Austria, and that succession to moveables in his estate should be governed by the law of his domicile. Under the Austrian laws governing disposition of moveables after death if there was no spouse or relative who took under the Austrian law, "the succession is confiscated as heirless property" by a State official (849). Kekewich J held that the fund passed to the English Crown as bona vacantia. He said, at 857, that the relevant Austrian governmental official: "...does not represent the deceased at all, except that by our law he is put in his place to defend actions by creditors or by persons claiming the estate against him. But he does not in any other sense represent the deceased. He does not claim through the persona of the deceased. He claims what is termed the 'glans caduca,' not the acorn on the tree, but the acorn which has fallen on to the ground from the tree. There is no possibility of getting at this property through the deceased. It is because there is no one who can claim through the deceased that the Crown steps in and takes the property. The Crown takes it because it is, as it is described in the cases, bona vacantia. It is property which no one claims - property at large - there is no succession. The Crown does not claim it by succession at all, but because there is no succession." 99He said, at 858, that in the relevant Austrian law: ... the word does not mean 'confiscated' in the sense of taking by way of penalty. It is taken, or assumed by the State, as its own property. What the Code says is that it is confiscated as heirless property - that is, as property which we call in England bona vacantia. It is property to which there is no heir, because neither country admits the right of the passing traveller, and therefore the property must fall to the Crown as a matter of right in the exercise of its sovereign power." 100He said, at 858-859, that the relevant Austrian law: "... seems to me to be precisely on the lines of our law as to bona vacantia. When there is no heir, some paramount authority steps in and claims it, not as against any one, but because there is no one to claim it at all." 101In In the Estate of Maldonado; State of Spain v Treasury Solicitor [1954] P 223, a Spanish subject domiciled and resident in Spain died intestate, leaving no next of kin. The deceased left personal property in England. The relevant Spanish legislation governing intestate succession said: "In default of persons having the right to inherit in accordance with the provisions of the foregoing sections the State shall inherit ..." (226). The Court of Appeal held that the Spanish law governing intestacy differed in a critical respect from the Austrian law that had been considered in Barnett, in that the Spanish State was a true successor of the deceased. For that reason, their Lordships held that the property did not pass to the English Crown as bona vacantia: 244-245. Evershed MR said, at 245: "If by the law of Spain it is possible to limit or define the individuals who can claim to be successors, namely, individuals having some connexion by blood or marriage with the deceased, I can see no reason why, in default of there being such an individual, the law of Spain should not nominate or constitute as heir any person or corporation, including the State itself. The idea of succession doubtless imports some notion of continuity, for example, continuity of title; but I see no reason why this conception should be inapplicable to the State which is constituted successor by its own laws." 102At the time that In re Barnett's Trusts was decided it was the Statute of Distributions 1670 that gave next of kin of an intestate rights of succession to property in relation to which the intestacy existed. However, the right of the Crown to receive assets in an intestate's estate that were bona vacantia arose under the general law, not under any statute. In England, the Administration of Estates Act 1925 assimilated the manner of devolution of real estate upon death to that of personal estate; limited the classes of blood relatives who could take on intestacy; and made express provisions, in s 46, for the Crown (or the Duchy of Lancaster or the Duke of Cornwall for the time being, as the case may be) to take the residuary estate of an intestate that was not disposed of under other provisions of that Act to a spouse or blood relative. Section 46 of that Act provided that the Crown (or the Duchy of Lancaster or the Duke of Cornwall) would take the residuary estate as "bona vacantia, and in lieu of any right to escheat". It is the 1925 English Act that provided the model for s 61B(7) P & A Act. 103There is a question, that so far as my researches have gone, is not completely resolved in English law, about whether the introduction of the 1925 English Act had the effect that thereafter the Crown acquired by succession, under a statutory right created by the 1925 legislation, rather than by virtue of the prerogative, property of an intestate that did not pass to a spouse or blood relative. 104In re Mitchell deceased; Hatton v Jones [1954] Ch 525 concerned a will under which a man left assets to his wife, and (in substance) if she predeceased him to whoever would have taken her estate if she had died intestate and without having married. The wife predeceased the testator. She was illegitimate, so her mother was not one of the next of kin under the statute. Wynn-Parry J held that the Crown took the property, not by virtue of a prerogative right, but because the 1925 English Act provided for the property passing to the Crown. He said, at 528-9: "As Mr. Buckley pointed out in his argument, section 46 falls under Part IV, headed "Distribution of Residuary Estates," and is preceded by section 45 by which, inter alia, the right of the Crown to take by escheat is abolished. Then comes section 46, which from its form appears to me to be designed to set out in subsection (1) a complete and exhaustive code as to how the residuary estate of an intestate is to be distributed. There are six subparagraphs to subsection (1), and they proceed on the basis of dealing with the nearest relations in the first place, and, as they progress, with more and more remote relations. Then at the end subparagraph (vi) provides: 'In default of any person taking an absolute interest under the foregoing provisions, the residuary estate of the intestate shall belong to the Crown or to the Duchy of Lancaster or to the Duke of Cornwall for the time being, as the case may be, as bona vacantia, and in lieu of any right to escheat.' Those last words 'as bona vacantia' appear to me to be merely descriptive and fit in with the scheme of the subsection, which is only to bring the Crown in at the very end of what I have described as a complete and exhaustive code. By section 57 it is expressly provided that the Crown is to be bound by this Act. Where, therefore, I find a subsection setting out a complete and exhaustive code, I think that the true view must be that the Crown takes directly under the statutory provision in section 46 (1) (vi), and not by any prerogative right under which, but for the statute to which the Crown submits, it would otherwise have taken." 105Mitchell is to be contrasted with In the estate of Hanley [1942] P 33. Hanley concerned a testatrix who left a will that bequeathed certain legacies, but did not appoint an executor of dispose of the residue of her estate. The Crown sought a grant of letters of administration, on the basis of its entitlement to the residuary estate as bona vacantia. The relevant probate rules set out a list of the order in which different categories of people were entitled to a grant of probate or administration with the Will annexed. Relevantly, that list included: (4) ... where the residue is not wholly disposed of, the persons entitled upon an intestacy ... (6) legatees or devisees, or creditors ... (8) the Crown: 106The questions at issue was whether the Crown was entitled, by virtue of being the person entitled upon an intestacy, to obtain a grant without first citing legatees, devisees, or creditors. Goddard LJ (Duparcq LJ agreeing), held that the Crown was required to cite the creditors, devisees and legatees. He said, at 36: "If the will had left the money direct to the Crown, as some testators have been known to do, the Crown would obviously have come in under the fourth heading as the ultimate residuary legatee of the testator but, if the Crown takes the estate by virtue of its right to bona vacantia, I do not think it can be said that it is a person entitled upon an intestacy within the meaning of the rule. The Administration of Estates Act, 1925, s 46, sub-s 1 (vi), provides in express terms that the residuary estate of a person dying in the circumstances therein specified goes to the Crown as bona vacantia, and that, I think, must be the matter that the framers of the rule had in mind when they placed the Crown at the bottom of the list." 107That aspect of the decision in In the Estate of Hanley was followed by Barnard J, the first instance judge in In the Estate of Maldonado at 232. That aspect of the decision of Barnard J was not referred to when Maldonado was considered in the Court of Appeal. 108Ing, Bona Vacantia, (1971) Butterworths, London, at 46, comments: "... on the wording of the rule, the decision of the Court of Appeal appears to have been correct. However the comments of Goddard LJ were hardly necessary for the decision, and it is submitted that those of Wynn-Parry J in re Mitchell represent the correct view." 109Williams, Mortimer and Sunnucks op cit at 265, states: "If an intestate dies without leaving a spouse, issue or the relatives set out above the Crown, the Duchy of Lancaster or the Duke of Cornwall, as the case may be, are entitled to his estate, by statute and not by the prerogative right." The authors cite Re Mitchell for the last proposition. 110A similar argument would be available in New South Wales, that the entitlement of the Crown under s 61B(7) P & A Act was by way of succession under the statutory right created by s 61B(7), not by way of the prerogative. Such an argument could gain support from s 61B appearing in a Division of the P & A Act that is entitled "Distribution of Intestate Estates", and that s 61B is itself entitled "Succession to Real and Personal Property on Intestacy". Under s 35 Interpretation Act 1987 the heading to the Division is part of the P & A Act, and for that reason an available aid to construction of s 61B(7). Under s 34 Interpretation Act the heading to s 61B is available as extrinsic material, if it is capable of assisting in ascertaining the meaning of s 61B(7). If on its proper construction s 61B(7) had the effect that the State will eventually acquire the fund now representing the Mosman property pursuant to a statutory right of succession under s 61B(7), the State would then be a privy of John, and so entitled to assert any equitable defences that John could have asserted. 111However, I do not propose to decide whether the State would acquire the property under such a statutory right of succession. Even if the State will acquire the property by virtue of the prerogative, it will do so by virtue of the property having been ownerless. Deciding whether the property was ownerless requires an examination of the situation as at a time before the Crown acquires any title. Before the Crown acquires any rights of property in the fund representing the Mosman property, that fund was held by the First Respondent. The First Respondent was able to assert all the equitable defences that John could have asserted. 112For completeness I should mention that, now, distribution of deceased estates on intestacy is governed by Chapter 4 of the Succession Act 2006. That Chapter sets out rules for the distribution of estates on intestacy that are different in some respects to the provisions that had applied under the P & A Act. In particular, the provision that carries out a similar function to that which had formerly been carried out by s 61B(7) P & A Act is s 136. It provides: "If an intestate dies leaving no person who is entitled to the intestate estate, the State is entitled to the whole of the intestate estate." Regardless of whether s 61B(1)(7) P & A Act conferred a statutory right of succession on the State, the new s 136 might possibly give the State a statutory right of succession, that does not depend upon the law relating to bona vacantia. However, the provisions of the Succession Act relating to distribution on intestacy did not commence until 1 March 2010, after the date of John's death.

Brown v New South Wales Trustee and Guardian

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