He held that the chose in action for due administration was itself property for the purposes of ss 58 and 116 (on the basis that "property" is defined in s 5 of the Bankruptcy Act to mean real and personal property), and that this chose in action was after-acquired property of the bankrupt that became vested in the trustee in bankruptcy upon the grant of letters of administration in the mother's estate. That being so, the trustee in bankruptcy became entitled to the money payable when the estate was distributed.
21 That reasoning was applied in Silvia v Thomson, even though in that case the grant of probate in the estate was made only after the bankrupt's discharge from bankruptcy. It is significant for present purposes that Lockhart J applied Livingston's case in circumstances where the testatrix had left her whole estate (evidently a solvent estate) to the bankrupt, and so the bankrupt was not merely entitled to residue that could be identified only upon the administration of the estate. His Honour described the nature of the bankrupt's rights with respect to the estate as follows (at 696):
"It is a right to have the estate of the testatrix properly or duly administrated. It is not, of course, a proprietary right in any specific asset of the estate of the testatrix."
22 Pevsner's case and Silvia v Thomson were applied by the High Court in Schultz's case (at 314). No doubt counsel for the plaintiff referred to these cases because they adopt the proposition that the right of a beneficiary with respect to an incompletely administered estate is a form of property. But they are consistent with the proposition, derived from Livingston's case, upon which counsel for the defendant relied, namely that the beneficiary's rights do not include any proprietary right with respect to the estate or any particular item of property forming part of the estate.
23 Schultz's case holds that this is so even in the case of a beneficiary of a particular parcel of land in a solvent estate. Their Honours observed (at 311-2):
"… the fact that the administration of the deceased estate was incomplete when Mrs Schultz was discharged from her bankruptcy means that the Official Receiver must point to some interest in property which vested in Mrs Schultz prior to her discharge from bankruptcy. That is because the property which is the subject matter of a bequest or devise does not vest in the named beneficiary upon the death of the testator. Section 45 of the Succession Act [approximately equivalent to s 44 of the Wills, Probate and Administration Act 1898 (NSW)] provides:
'(1) The property to which a deceased person was entitled for an interest not ceasing on his death … shall on his death and notwithstanding any testamentary disposition devolve to the vest in his executor …'
Not only does the legal ownership in the property not vest in the named beneficiary at the time of death of the testator, nor does the equitable ownership. That emerges from the Privy Council's decision in [ Livingston ]. The reason for this is that, prior to administration of the deceased estate, there is no specific property capable of constituting the subject property of any trust in favour of the beneficiary. It could not be said at that stage what part or parts of the testator's property would need to be realised for the purposes of the administration … So it was held that the beneficiary does not have a proprietary interest in each of the assets which are the subject of the devise or bequest such that he or she can say 'this is mine' or 'this belongs to me'. Although Livingston was concerned with the residuary estate, the observations it contains apply with equal force in the case of a specific bequest or devise."
24 I interpose here the comment that, although in the present case much of the administration of the estate of Mrs Kelly has been attended to, her estate remains an incompletely administered estate to which these observations apply. In particular, it emerges from the defendant's evidence that in the course of administration of the estate she has yet to attend to the sale of one or more properties so as to pay out the Banksia loan. Therefore the plaintiff is in the position of not knowing which particular property or properties will be made available to him (as to a half share) when the administration of the estate has been completed.
25 But that is not the end of the matter. Australian authorities, including Schultz, indicate that a beneficiary in an incompletely administered estate, though not having an equitable interest in any particular assets of the estate, has an equitable right (perhaps proprietary) in relation to the assets of the estate as a whole. That was explained by the following observations of the High Court in Schultz's case (at 312-314):
"In holding that an executor holds the whole property of the deceased 'for the purpose of carrying out the functions and duties of administration, not for his own benefit' [[1965] AC, at p 707], Viscount Radcliffe, speaking for the Judicial Committee, stated [[1965] AC, at p 707]:
'What equity did not do was to recognize or create for the residuary legatees a beneficial interest in the assets in the executor's hands during the course of administration.'
His Lordship went on to consider earlier authority which had expressed seemingly inconsistent ideas as to the position of the beneficiary of an unadministered estate, remarking upon the range of 'meanings which can be conveyed by the words 'interest' and 'property'' [[1965] AC, at p 712]. But it is significant that his Lordship approved [[1965 AC, at p 717] the view of the law expressed by Fullagar, Kitto and Menzies JJ in this Court: Livingston v Commissioner of Stamp Duties (Queensland) [(1960) 107 CLR 411].
"Fullagar J considered that the residuary beneficiary had an equitable interest in the entire mass of the testator's estate and that it may be that she had an equitable interest in every part of that mass, an interest which could be described as a proprietary interest or 'property', though there was a problem in justifying the accuracy of these descriptions as precise descriptions of the nature of the interest [(1960) 107 CLR, at p 438]. Kitto J acknowledged that the residuary beneficiary in an unadministered estate was not the legal or beneficial owner of the assets in that estate. However, his Honour described the interest of the residuary beneficiary in assets of such an estate as consisting of rights 'with respect to, or 'in', or ad each specific asset for the time being in the estate' [(1960) 107 CLR, at p 451]. Menzies J, agreeing with Fullagar J, in speaking of the residuary beneficiaries' chose in action, concluded [(1960) 107 CLR, at pp 458-459] that they had 'no separate or separable property in the specific items or assets of which the estate is made up', in the words of this Court in Smith v Layn [(1953) 90 CLR 102, at p 108]. And Dixon CJ, who was in the minority, spoke [(1960) 107 CLR, at p 426] of the residuary beneficiary being entitled at her husband's death to 'an equitable interest in the Queensland property forming part of his estate', that interest being incapable of definition in terms appropriate to legal estates or chattels real.
"The right which any beneficiary has in an unadministered estate springs from the duty of the executor to administer the estate, to preserve the assets and to deal with them in the proper manner. Each beneficiary has an interest in seeing that the whole of the assets are treated in accordance with the executor's duties. In that sense, the beneficiaries as a class may be said to have an interest in the entire estate. But it does not follow that each piece of property which goes to make up the estate is held on a particular trust for the beneficiary named as its intended recipient upon completion of administration: Horton v Jones [(1935) 53 CLR 475, at p 486]. Whether or not the estate is held on a trust for the beneficiaries as a class in the usual sense in which the word 'trust' is used, so as to confer a specific proprietary interest, as distinct from a general, non-specific interest, upon all beneficiaries, is not something which arises for consideration in this case.
"Nevertheless, Mrs Schultz acquired upon the death of [the testatrix] a right to have the deceased estate administered in accordance with the duties of the executors. Though not a legal or equitable owner of the assets which were the subject of the devise and bequest in her favour, she had, by virtue of the chose in action created by that devise and bequest, an expectation that the assets would pass to her upon completion of the administration, subject to their being realised to meet any outstanding liabilities and to defray the costs of administration, and an interest in respect of those assets. That interest was derived from and depended upon the chose in action. The interest is of such a kind that, when a beneficiary transmits a chose in action (or part thereof), or that chose in action passes by operation of law, such as under the Bankruptcy Act, that transmission naturally encompasses not only the chose in action but also the expected fruits of that chose in action: Horton v Jones ; In re Leigh's Will Trusts [[1970] Ch 277, at p 282]."
26 Horton v Jones, approved by the High Court in Schultz, warrants further consideration. The question was whether an oral contract made between Mrs Horton and the late Mr Jones, that he would leave her his "fortune" if she looked after him for the rest of his life, was enforceable notwithstanding s 54A(1) of the Conveyancing Act 1919 (NSW). Section 54A(1) says (relevantly) that no proceedings may be brought upon any contract for the disposition of any interest in land unless the contract is evidenced in writing. The "fortune" of Mr Jones consisted principally of his interest in the estate of his father under his father's will, and his interest by virtue of his being sole next of kin of his deceased children who were beneficiaries under that will. The father's estate had not been fully administered, but apparently the debts and liabilities of the estate had been discharged (see 53 CLR at 486). The most valuable assets were mortgages secured over land.
27 Rich and Dixon JJ described the interest of Mr Jones at the time of the contract as follows (at 486):
"It was suggested that because the deceased had no more than a right to have the estates of his deceased children administered in due course and to receive the net surplus, and that these estates in turn comprised no more than an analogous right in the residue of his father's estate, no right in any specific asset in the estate of the deceased's father subsisted in the deceased. This may at once be conceded [citing Lord Sudeley v Attorney-General [1897] AC 11 and other cases]. But it is not the consequence that no right of property subsisted in the deceased, nor that no right of property subsisted involving an interest in land. The deceased possessed equitable rights enforceable with respect to the assets considered as a whole. It is true that he had no immediate right to possession or enjoyment and that his precise rights involved, at any rate prima facie, administration, and possibly necessitated conversion and calling in of investments. But, none the less, he had more than a mere equity. He had an equitable interest and it related to assets which included interests in land …".
28 The plaintiff's right to insist on the due administration of his mother's incompletely administered estate by his sister, the executrix, did not make him a "co-owner" under s 66G of any of the three properties of which he was a co-beneficiary, and did not make any of those properties a "property … held in co-ownership" for the purposes of that section. Livingston's case, confirmed by Pevsner, Sylvia and Schultz, establishes that the right to require due administration does not give rise to any proprietary right to any particular asset in the unadministered estate, and it follows that none of those properties was held under "ownership whether at law or in equity in possession by two or more persons … as tenants in common" for the purposes of the definition of "co-ownership" in s 66F. The ownership of the three properties vested in the defendant as executrix upon the grant of probate, under s 44(1) of the Wills, Probate and Administration Act 1898 (NSW).
29 Is s 66G(1) attracted by virtue of the plaintiff's right, recognized in Schultz's case and Horton v Jones, with respect to the property in the estate as a whole? In my opinion this question must be answered in the negative, for two reasons.
30 First, s 66G(1) relates to specific parcels of property in co-ownership, both in terms of its wording and its purpose. The opening words of the subsection identify some particular property held in co-ownership, and the section authorises the court to appoint trustees to that property for the purposes of sale or partition. The purpose of s 66G(1) is to allow the court to authorise the sale of particular property, by making orders which, typically, include orders relating to the process of sale and the destination of the purchase money. Orders of these kinds do not appear appropriate where the applicant for orders has only a right in respect of a potentially fluctuating group of assets, stemming from his or her entitlement to compel the due administration of those assets.
31 Secondly, s 66F(1) defines co-ownership as ownership, whether at law or in equity, in possession. In the passage cited from Horton v Jones, 53 CLR at 486, Rich and Dixon JJ make it expressly clear that a beneficiary in an incompletely administered estate has no immediate right to possession or enjoyment of any particular assets of the estate.
32 The plaintiff has an interest in relation to the assets of the estate as a whole, and an expectation that, upon due administration, he will receive the half-interest in one or two or all three properties to which he is entitled under the will and the court's orders. An interest of that kind was held, in Horton v Jones, to be an "interest in land" for the purposes of s 54A. But there is a distinction between a provision such as s 54A, which is "directed to agreements concerning, covering or extending to lands or interests therein" (53 CLR at 489 per Starke J), and a provision such as s 66G(1), which confers authority on the court authorise the sale of identifiable and specific property. In my opinion the general and inchoate interest described in Schultz's case and Horton v Jones, even if it is a proprietary interest in all of the assets of the unadministered estate, is not sufficient to attract the jurisdiction under s 66G.
33 My conclusion is that the application for the appointment of trustees for sale under s 66G(1) must fail, because the section is inapplicable to the circumstances of this case. The plaintiff is not left without remedies. He may seek to enforce his chose in action to insist upon the due administration of the estate. That may lead to the replacement of the defendant as administrator of the estate if due cause is shown. I am not in a position to express any opinion on those matters. The application for orders under paras 1-8 of the summons will be dismissed and the remainder of the summons will be stood over to the Registrar's list for directions.
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