Stuart v Kingston [1923] HCA 17

Stuart v Kingston [1923] HCA 17 - HCA 1923 case summary — Zoe

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On 10th April 1899 an agreement was entered into between Charles Cameron Kingston, Mrs. Lucey Kingston and Nathaniel Alexander Knox and the trustees of Sir George Kingston's will in the following terms: - "In the Estate of Sir George Kingston deceased. - In order to settle family differences it is agreed between the undersigned as follows : - (1) Mrs. C. C. Kingston to take the Marino Estate subject to mortgage of £500 and subject to Regan's tenancy, also Sec. 4891 Hundred of Noarlunga subject to lease to J. Westcombe. (2) Mrs. Kingston to pay to the trustee £270 in cash on transfer and possession. (3) All arrears of rent in respect of ' Marino' and Sec. 4894 Hundred of Noarlunga to belong to the trustees. (4) Mrs. Kingston and her trustee Mr. N. A. Knox and Mr. C. C. Kingston to release the trustees from all claims under the will of Sir George Kingston deceased or otherwise howsoever in respect of the estate of Sir George Kingston deceased. (5) The trustees to release C. C. Kingston from all claims. (6) Mr. and Mrs. C. C. Kingston to give up possession of the Grote Street property to the trustees on or before the 21st day of May next. (7) Mrs. Kingston to be entitled to the possession of ' Marino' on or before the 21st day of May next simul- taneously with vacation of Grote Street and fulfilment of agreement in other respects. (8) Mr. C. C. Kingston to have the books at Grote Street belonging to Sir George Kingston's estate and any other personal estate of the testator on the premises. (9) The advertised sale of the properties of the estate to be withdrawn and Grote Street not to be advertised for sale again till after the 21st of May next. (10) 'Marino' to be taken subject to Regan's tenancy, the trustees guaranteeing that same is terminable before July 1900 by a half year's notice which may be given not later than October next and that the rent is not less than £100 per annum. With

Marino' is taken any right of action against Regan except for rent and royalty in arrear."

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before, and that the trustees recognized that, even if the delay selling and the waste were occasioned by the conduct of Ch Cameron Kingston, that fact would afford no answer to a suit Mrs. Lucy Kingston as assignee of Strickland Gough Kingston's sha An analysis of the terms of the agreement shows that the consid tions moving from Charles Cameron Kingston and Mrs. Luey Kings were (a) the payment of £270 by Mrs. Lucy Kingston, (b) a rele by Mr. and Mrs. Kingston and Nathaniel Alexander Knox of claims against the trustees under the will of Sir George Kings otherwise howsoever in respect of his estate, (c) the giving possession of the Grote Street property. For these consideration which included a release of the trustees from their personal liabili for alleged breaches of trust and waste, the trustees agreed to conv and assign to Mrs. and Mr. Kingston real and personal proper belonging to the trust estate and to release Charles Cameron Kin, from all liability to the trust estate. The agreement was indivisil both in form and in substance, and the proceedings to enforce it v taken on that footing. The claim against the trustees in respect alleged waste had been put forward by both Mr. and Mrs. Cameron Kingston in 1898 and 1899, and the case for opinion sho that the trustees or their advisers were apprehensive of procee in that respect. Part of the consideration for the agreement sisted of a release of the trustees from their personal liability in respe of this claim so far as the shares of Charles Cameron Kingston at Strickland Gough Kingston were concerned. It follows that th consideration for the disposition of the trust property included personal benefit or advantage to the trustees, and this fact alone in my opinion, sufficient to dispose of the contention that the tra action was authorized either by the trust for sale contained in tl will, or by the power of the trustees to appropriate trust prope in satisfaction of the share of a beneficiary, or by the power confer by the Trustee Act to compromise claims relating to the trust e

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as co-trustee with Ludovina. Under the will of Hester, all income was to be paid to Ludovina for life, then to Charlotte for life, and _ the corpus of the share was then to go to the plaintifis, the children of Strickland. Ludovina had proved this will as executrix. Strickland had died intestate in 1897, leaving a widow - the present defendant Kathleen Pittar Kingston - as well as two daughters, infants; and all were entitled to share in his estate under the Statute of Dis- tributions. But Strickland had mortgaged his interest. He had assigned his fifth interest to the Bank of South Australia, to secure his overdraft of £3,780, and a debt of £6,926 owing by the firm of - Kingston & Kingston (Strickland and Charles constituted this firm). - This mortgage was transferred to the Union Bank in 1892, when | that Bank took over the business of the Bank of South Australia; and, as the account was worthless, the Union Bank had sold the mortgage on 31st October 1893, to Charles Kingston for £300, and assigned it by his direction to Mr. Roberts, a solicitor, who apparently had helped the Charles Kingstons to find the purchase-money ; and eventually the mortgage was assigned to Mr. Knox, a solicitor, on behalf of Mrs. Kingston. It does not really matter whether Charles Kingston or his wife Lucy was the true owner of the mortgage. Charles Kingston had also mortgaged his interest to the trustees, Ludovina and Hester, on 17th January 1889, to secure £12,375. He had previously agreed with them to buy the Grote Street pro- perty, the city residence of the testator, but had failed to pay either principal or interest ; he had then agreed to relinquish all claim as _ purchaser; but the trustees were at liberty to sell Grote Street, - crediting Charles with the purchase-money as against his debt. He lived with his wife Lucy at Grote Street, as a monthly tenant; in - fact he was in default as to the rent, but would not quit the residence. Charles had also effected a second mortgage over his interest to the Bank to secure his own overdrawn account, the partnership account, - and the overdrawn account of Strickland. He had been released by the Bank on 5th December 1898 on payment of £1,500.

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be enforced by the Court. In reliance upon this defence, he asserted that the trustees were guilty of waste and conversion of Sir George's: estate, for which both were, or one of them was, responsible ; and_ were seeking to enforce the agreement for the purpose of relieving themselves of their personal liability, and, further, that the trustees were unable to make title to " Marino" and the Section in the Hun- dred of Noarlunga without the consent of the daughters of Strick- land Gough - the present plaintifis. The trustees applied for an order under Order LXIX. of the Rules of Court 1893, for immediate - relief on their statement of claim, but Boucaut J. ordered that it be referred to the Master to inquire whether the infant children of Strickland Gough were interested in the agreement for compromi sought to be thereby enforced, and, if so, whether they were benefited or prejudiced, and whether any and what other persons were neces-_ sary parties in respect of Hester's share in the estate of Sir George, and also whether in any event the interests of the infants required that possession of Grote Street should be given up by the defen- - dants. I do not understand the object of this order. It may have been for the purpose of aiding the Court to exercise what discretion it had in the action for specific performance. Quite rightly the infant children had not been made parties to such action, and no provision was made for their representation on the inquiry directed under the order of Boucaut J., nor was any person appointed to represent them on that inquiry. The inquiry was held, and the - Master reported that the plaintiffs were, by virtue of the will of Hester, interested in the agreement sought to be enforced, that the infants were benefited by the agreement, that no parties were necessary in the action in respect of Hester's share in the estate, and that in any event the interest of the infants required that pos- - session of Grote Street be given to the trustees. The action came again in October 1899 before Boucaut J. Charles Cameron, without

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Kingston no question could arise. As it was not, then the question ; is whether Charles Cameron and his wife obtained a good title, and whether the beneficiaries are estopped from impeaching the agree- ment and insisting that the decree is not binding upon them. Unless a person is a party to a suit, or is properly represented in the suit, a decree in that suit does not bind him (Templeton v. Leviathan Pro- _prietary Ltd. (1) ). The plaintiffs were not parties to the suit, and Fite critical question is whether they were properly represented in it. It is not possible, in my opinion, to sustain the proposition that the trustees represent their beneficiaries in a suit in respect of a transaction wholly beyond their authority as trustees (In re De Leeuw ; Jakens v. Central Advance and Discount Corporation (2) ). Then, do the findings of the Master, upon which the decree for specific erformance was based, affect that result ? It will be remembered that the Master, pursuant to an order for inquiry made by the Court, reported that the agreement of April was for the benefit of the -plaintifis who were infants, and that no parties were necessary in that action in respect of their aunt Hester's share in the estate of Sir George Kingston. As already stated, I do not profess to under- stand this inquiry, but if it were intended as a method of obtaining the sanction of the Court to the agreement on behalf of the infants, then it wholly failed in effect, for the representation of these infants was wholly neglected. In point of fact, however, the Court did not sanction or purport to sanction the agreement on behalf of the infants, and, if it had, I take leave to doubt whether such an exer- cise of jurisdiction could have been sustained. Therefore the decree for specific performance does not stand in the way of the relief claimed by the plaintiffs in this action. It is perhaps a matter for regret that a transaction carried out under the decree of a Court of justice can be challenged after many years by persons who were not parties to the action nor bound by the decree, but it must be admitted that otherwise their interests might be destroyed.

At a glance

Court

Decision date

Before

Source

Judgment (311 paragraphs)