Stuart v Kingston [1923] HCA 17

j By his will a testator who died in 1880 gave his real and personal property ' to his trustees upon trust to sell and, in the events that happened, to hold the

*Sec. 69 of the Real Property Act 1886 (S.A.) provides that "The title of every registered proprietor of land 'shall, subject to such encumbrances, liens, estates, or interests as may he notified on the original certificate of such land, be absolute and indefeasible, subject only to the following qualifica- tions : - 1. In the case of fraud, in which case any person defrauded shall have all rights and remedies that he would have had if the land were not

under the provisions of this Act: Pro- vided that nothing included in this sub- section shall affect the title of a regis- tered proprietor who has taken bona fide for valuable consideration, or of any 'person bona fide claiming through or under him": &c. Sec. 70 provides that "In all other cases the title of the tegistered proprietor of land shall pre- vail, notwithstanding the existence in Her Majesty, Her heirs, or successors,

proceeds upon trust for his five children (who survived him) in equal shares.

or in any person of any estate or interest whatever whether derived by grant from the Crown or otherwise, which but for this Act might be held para- mount or to have priority; and not- withstanding any want of notice or insufficient notice of any application, or any error, omission, or informality in any application or proceedings." Sec. TI provides that "Nothing in the two preceding sections contained shall be construed so as to affect any of the following rights or powers, that is to say... v. The rights of a cestui que trust where the registered proprietor is a trustee, whether the trust shall be express, implied, or con- structive : Provided 'that no unregistered estate, interest, power, right, contract, or trust shall prevail against the title of a registered pro- prietor taking bona fide for valuable consideration, or of any person bona

Included in his real property were his town house, his seaside residence block of land, In 1899 one of the testator's sons, A, was in occupation of town house under a Jease from the trustees, and, as he was paying no_

interest, they were desirous of obtaining possession of the house, A and his wife were, at the same time, making charges of waste against the trustees in respect of the seaside residence, A's wife having by assignment acquired th interest of the testator's other son, B, in the estate. An agreement was April 1899 made between A and his wife and the trustees, which was expr to be for the purpose of settling family differences, whereby it was (inter alia) that A's wife should take the seaside residence and the bloc land and should pay a certain sum of money on transfer of those properti that A and his wife should release the trustees from all claims and sho tive up possession of the town house, and that the trustees should rd 'A from all claims. 'This agreement was prepared by the solicitor for A by the solicitor for A's wife. A and his wife not having given up

performance of the above agreement ; A and his wife by their defence that the agreement was a breach of trust, and charged the trustees waste. 'The Master, on an inquiry directed by a Judge, reported that present appellants, who were the children of B, were interested in the aj ment, being presumptively entitled under the will of a deceased daug the testator to her share in the testator's estate and were benefited b

fide claiming through or under him." ment, shall not of itself be imput Sec. 72 provides that "Knowledge of fraud." Sec. 249 provides the existence of any unregistered estate," Nothing contained in this Act interest, contract, or trust shall not of affect the jurisdiction of the Com itself be evidence of want of bona fides law and equity in cases of actual fra #0 as to affect the title of any registered _ or over contracts or agreements for tl

proprietor." Sec, 186 provides that sale or other disposition of land or ov "No person contracting or dealing equities generally. And the int with, or taking or proposing to take a of this Act is that, notwithstandin transfer or other instrument from the provisions herein contained for pt registered proprietor of any estate or venting the particulars of any interest in land, shall be required, or from being entered in the

in any manner concerned to inquire Book, and without prejudice to t into or ascertain the circumstances powers of disposition or other under, or the consideration for, which conferred by this Act on pro such registered proprietor or any pre- _ of land, all contracts and other vious registered proprietor of such arising from unregistered transactiot estate or interest is or was registered, may be enforced against such Pp or to see to the application of the pur- _prietors in respect of their estate chase-money, nor be affected by notice __ interest therein, in the sami rf direct or constructive of any trust or such contracts or rights may be et unregistered interest, any law or equity forced against, proprietors in respe tothe contrary notwithstanding." Sec. land not under the provisi

187 provides that "The last preceding Act: Provided that no unre section shall not protect any person estate, interest, contract, or agre who has acted fraudulently or been a shall prevail against the title of party to fraud, but the contracting, or bona fide subsequent transferee, mo dealing, or taking, or proposing to take - _gagee, lessee, or encumbrancee, for

a transfer or other instrument as afore- able consideration, duly

said, with actual knowledge of any under this Act."

agreement, and that no parties were necessary to the action in respect of the H. C. or A,

share of that deceased daughter. 'The hearing of the action then took place, and the Judge, notwithstanding the opposition of A's wife, made an order for specific performance of the agreement. Pursuant to that order the seaside residence, which had been brought under the Real Property Act 1886 (S.A.) in June 1899, was in April 1900 transferred to A's wife, and the transfer was registered in May 1900, and the block of land, which was under the general law, was conveyed to A's wife in the same month. In 1920 the appellants, having then attained their majority, brought an action against the trustees and the representatives of A and of his wife, who had both died, claiming a declaration that the agreement of April 1899 was a breach of trust, and that. the seaside residence and the block of land still formed part of the the testator; the action was dismissed. On appeal to the High Court,

Held, (1) that, so far as the seaside residence and the block of land were con- cemed, the agreement was neither a sale authorized by the trust for sale, nor an appropriation of property in satisfaction of the share of B, nor a compromise 'or settlement of the claim of A's wife as assignee of the share of B which the trustees were empowered to make under sec. 21 of the Trustee Act 1893 (S.A.), and was therefore a breach of trust on the part of the trustees ; (2) that the appellants were not bound by the agreement, not being parties toit, nor were they bound by the order of the Supreme Court of October 1900, since neither they by representation or otherwise nor the estate of C, under whom they claimed, were parties to the proceedings ; and (3) that as A's wife had notice of the trust and knew the facts which made the agreement a breach of trust, the appellants were entitled to the declaration asked in respect of the block of Jand, which had not been brought under the Real Property Act 1886.

Held, also, by Knox ©.J. and Starke J. (Higgins J. dissenting), that, although A's wife had knowledge of the trust and of the facts which made the agreement 'of April 1899 a breach of trust, in taking the transfer of the seaside residence she had in the circumstances of the case acted without personal dishonesty 'or moral turpitude, and that consequently she was not guilty of fraud within the meaning of sec. 69 of the Real Property Act 1886, that she took the transfer bona fide within the meaning of secs, 69 and 71, that she had not "'acted fraudulently or been a party to fraud" within the meaning of sec. 187, and that she was a "bona fide subsequent transferée for valuable con- sideration" within the meaning of sec. 249; and therefore that she. had acquired an absolute and indefeasible title under the Act to the seaside residence, and her representative was entitled to hold it free from the trusts of the testator's will.

Per Higgins J.: - The provisions of secs. 186 and 187 of the Real Property Act 1886 do not protect A's wife as transferee, as at the time of the agreement the trustees with whom she dealt were not registered proprietors of the land. Where trustees discharge claims made against them personally by a bene- ficiary by transferring to her a portion of the trust estate; or where the beneficiary induces the trustees to convey to her an asset of the trust, and to release a debt owing by her husband to the trust, in consideration of her

releasing the trustees from charges of wasting the estate - the transacti fraudulent. It is not necessary to show a malicious intent to injure « beneficiaries; it is enough to show an attempt to benefit herself. 4

Decision of the Supreme Court of South Australia (Angas Parsons J.)

An action was brought in the Supreme Court by Kathleen Mol Stuart, for herself and as administratrix with the will ann the estate of Kathleen Holland Kingston deceased left unadn tered by Ludovina Cameron Kingston and as one of the admin trices of the estate of Strickland Gough Kingston deceased, ; Dorothy Kingston, for herself and as one of the administratrie the estate of Strickland Gough Kingston deceased, against Kathl Pittar Kingston, as sole surviving executrix of Charlotte Jw Giles deceased, who at her death was the sole surviving truste Sir George Strickland Kingston deceased, and the Public as administrator with the will annexed of the estate of Lucy! Kingston deceased, and as administrator of the estate of Cameron Kingston deceased left unadministered by Lucy May K ston deceased, and Charles Laurence McCarthy, as repr himself and the other next-of-kin of Lucy May Kingston By their statement of claim the plaintiffs claimed (1) against defendant Kathleen Pittar Kingston, a declaration that a cet agreement dated 10th April 1899 was a breach of trust and void never was binding on the plaintiffs, and that the same shoul delivered up to be cancelled, and that the properties therein m tioned formed part of the estate of Sir George Strickland King deceased, and followed the trusts of his will; (2) against the di the Public Trustee, a declaration that the assets which

of Charles Cameron Kingston deceased, belonged to and forn of the estate of Sir George Strickland Kingston, and that

followed the trusts of his will; (3) an order restraining Public Trustee from proceeding with the administration of the é of Lucy May Kingston deceased, otherwise than by delive the said agreement to be cancelled and by transferring

assets to the legal personal representatives of Sir George Strickland Kingston ; (4) an order directing Kathleen Pittar Kingston to distribute the estate of Sir George Strickland Kingston among the persons thereto legally entitled; and (5) an order that the plaintiffs are the persons legally entitled to the assets comprised in the agreement of 10th April 1899 and all other assets in the estate of Sir George Strickland Kingston.

The action was heard by Angas Parsons J., who dismissed it with costs.

From that decision the plaintiffs now appealed to the High Court.

The material facts are stated in the judgments hereunder.

Ligertwood (F. Villeneuve Smith K.C. with him), for the appellants. 'The trusts of the will of Sir George Kingston were for sale and con- version and the agreement of 10th April 1899 was not an execution

of that power and was a breach of trust. The transfer of " Marino " was not a sale, nor was the conveyance of Sec. 4894 Hundred of Noarlunga. No proper consideration was given. Mrs. Lucy Kingston took the benefit of the agreement with knowledge of all the facts and Was a constructive trustee for the appellants. The judgment in the action brought in 1899 by the trustees of Sir George Kingston against Charles Cameron Kingston and his wife is not binding on the appellants, who were not in any way parties to it. [Counsel referred to Brassey v. Chalmers (1); Osborne to Rowlett (2).]

F. G. Hicks and D. Kerr, for the respondent Kathleen Pittar Kingston, submitted to the order of the Court.

Finlayson, for the respondent the Public Trustee, submitted to the order of the Court.

Cleland K.C. and Napier K.C. (with them McLachlan), for the respondent McCarthy. The agreement of 10th April 1899 was not a breach of trust, but the trustees were authorized to enter into it either as a sale or as an appropriation (In re Lepine; Dowsett v. Culver (3); In re Beverly; Watson v. Watson (4) ). 'The trustees

3. (1892) 1 Ch., 210. (2) (1880) 13 Ch. D., tay bor}

might properly compromise and satisfy the claims of Charles Kingston and of Mrs. Lucy Kingston as mortgagee of the shi Strickland Gough Kingston in the estate by a sale or appropri (see Trustee Act 1893 (S.A.), sec. 21; In re Warren; Weed Reading (1); Forshaw v. Higginson (2); In re Postlethwaite ; thwaite v. Rickman (3) ). The Court will presume honesty and 1 all necessary inquiries were made (Watt v. Assets Co. (4) ). is no evidence of fraud, or that if at the time the agreement made the estate had been wound up the appellants would have in a better position than that in which they are now. Mrs. Kingston was compelled by a Court of competent authority, a proceedings in which all the necessary parties were represente carry out the agreement, and the decree then made is an ansv the appellants' action. The appellants were sufficiently repr by: the executor of Hester Holland Kingston in whose right the (see Rules of the Supreme Court 1893 (S.A.), Order LXIX.). agreement was a breach of trust the appellants are not entitled follow the trust property into the hands of the transferee unl

v. Whipp (5): Blackwood v. London Chartered Bank of A (6) ). Mrs. Luey Kingston was entitled to say that she did | take the property voluntarily with notice of the trust but was compelled to take it by the decree of a competent Court application of the trustees. As to " Marino," which was bro under the Real Property Act 1886 (S.A.), the transfer to Mrs. Kingston became indefeasible. Knowledge that an unreg trust will be defeated is not fraud which will take away the tection given by secs. 69, 70 and 186. There must be dishont (see Wicks v. Bennett (7) ). [Kwox C.J. referred to Doody v. Higgins (8).| The proviso to sec. 71 and sec, 72 substitute for the equi doctrine of notice actual or constructive of a trust the test of g faith. Unless there is an intent to injure or a reckless dis (1) (1884) 51 L.T., 561. (5) (1884) 26 Ch. D., 482, at p. (2) (1857) 8 DeG. M. & G., 827, at p. (6) (1874) LR. 5 P.C., 92, at p. 10 834. (7) (1921) 30 C.L.R., 80, at p. (3) (1888) 60 ii

T., 514, 8) (1852) 9 Ha, Ay (4) (1905) A.C., 317, at 333, (8) (1852) pp. xxii

the interests of others, there is not an absence of bona fides under H.C. oF A.

secs. 71 and 72, Jeeelaee a {Starke J. referred to Butler v. Fairclough (1). Sruart [Kyox C.J. referred to Barry v. Heider (2).| eee

Under sec. 249 the trustees were registered proprietors subject to the unregistered interests of the beneficiaries, and Mrs. Lucy King- ston was a subsequent transferee for valuable consideration but she was a " bona fide" transferee within the meaning of the proviso and her title is protected by it, for bona fide there means honest. Even if knowledge that the transaction is a breach of trust is sufficient to constitute fraud or want of bona fides, there is no evidence that Mrs. Luey Kingston knew that the agreement was a breach of trust. (Counsel also referred to Assets Co. v. Mere Rothi (3); Smith v. Essery (4); National Bank v. National Mortgage Co. (5); George y. Australian Mutual Provident Society (6); Public Trustee v. Arthur (7); Gregory v. Alger (8); Cooke v. Union Bank (9); Oertel v. Hordern (10); Crout v. Beissel (11); Taylor v. Davies (12).|

Ligertwood, in reply. Where by the act of taking a transfer of property the transferee becomes a trustee he is not protected by the Real Property Act 1886. The effect of the agreement of 10th April 1899 was that Mrs. Lucy Kingston with notice of the trust took an asset out of the estate, and she thereby became a trustee (Soar v. Ashwell (13) ). The Real Property Act 1886 is different from the similar Acts in the other States by reason of sec. 71 (v.) and sec. 249. Sec, 249 preserves the jurisdiction of Courts of law and equity over equities generally, and expresses an overriding intention that all unregistered trusts may be enforced against registered proprietors in such manner as such rights may be enforced in respect of land not under the Act. That section is wide enough to cover construc- tive trustees. Sec. 71 (v.) expressly provides for constructive

(1) (1917) 23 C.LR., 78. 15 ALT, 22, at p. 25. (2) (1914) 19 CLR. 197. (9) (1893) 14. N.S.W.L.R. (Eq.), 280. (3) (1905) A.C., 176, (10) (1902) 2 S.R. (N.S.W.) (Eq.), 37,

(4) (1891) 9 N.Z.L.R., 449, at p. 463. at p. 47. (5) (1885) 3 N.Z.L.R., 257, at p. 263. (11) (1909) V.L.R., 207; 30 A.L.T., 185.

trustees. The proviso to that section and sec. 72 do not cut do the provisions as to constructive trustees but they apply to taking from constructive trustees. This is shown by sub-secs, 1, mr. and vir. of sec. 69, where the word " taking " is used in the s context and must refer to a person taking from a registered pro prietor who is affected by those sub-sections. The doctrine constructive trusts is qualified by secs. 186 and 187 to the ex that notice or knowledge of a trust does not turn a person taking transfer into a constructive trustee. That still leaves the Act to apply to those cases where a person taking the trust property knoy the nature and terms of the trust and knows that in transferring tl trustee is committing a breach of trust which is instigated by the tran feree. This view is supported by National Bank v. National Mortgag Co. (1); Gregory v. Alger (2); Toko Reihana v. Moore (3); Te ton v. Leviathan Proprietary Ltd. (4). The contrary view of Act cuts out the whole doctrine of constructive trusts arising a person in a fiduciary capacity making a profit from his trus Assuming that the proviso to sec. 71 applies, Mrs. Lucey

was made the trustees were not registered proprietors and becaus she did not act bona fide in the transaction. Bona fide means bon fide in regard to the trust. Mrs. Lucy Kingston knew the term of the will, that Hester Holland Kingston was dead, and that Mrs Giles had only a life interest; so that she must also have kno that there were other beneficiaries in the estate of the testator. Knowing that, she did not act bona fide because the agreement, a she knew, had its origin in wrongful acts of the several parties to it The trustees had wrongfully committed waste and had allowed 1 beneficiaries to overdraw their shares; Charles Cameron Kin had wrongfully refused to pay money due by him to the esta and he and his wife were wrongfully in possession of Grote s upon which they were trespassers. The agreement was in its wrongful in its stipulations because Charles Cameron Kingston his wife used their wrongful possession of Grote Street for the purpo of stipulating for breaches of trust by the trustees, namely,

(3) (1890) 8 N.Z.L.R., 315. 5 A.L.T., 22. (4) (1921) 30 C.L.R., 34.

release of Charles Cameron Kingston from his indebtedness to the estate, the parting with the books and personal property to him, and the appropriation of " Marino" to Mrs. Lucy Kingston without a sale. The agreement was also wrongful because Charles Cameron Kingston and his wife by making charges of waste induced the trustees to purchase immunity from those personal charges by parting with trust property. The judgment in the action for specific performance is no protection to Mrs. Kingston, because her motive in resisting it was not bona fide but was to continue her wrongful possession of Grote Street. Under the Trustee Act 1893 (S.A.), sec, 21, there is no power in trustees to compromise personal claims against them or claims by beneficiaries (De Cordova v. De Cordova (1) ). [Counsel also referred to Wigley v. Crozier (2).]

Kxox C.J. The substantial question in this proceeding is whether the appellants - the plaintiffs in the action - are entitled to compel the restoration to the estate of Sir George Kingston of certain lands, namely, (a) the property known as " Marino" and (b) a parcel of land known as Sec. 489 Hundred of Noarlunga.

In the view which I take of the case the relevant facts are as follows : - Sir George Kingston died in the year 1880 leaving him

• Surviving five children, Ludovina, Hester, Charlotte, Strickland Gough and Charles Cameron, all of whom had attained the age of twenty- one years, his wife having predeceased him. By his will he devised his freehold and leasehold estates to his trustee upon trust, when and as they, in order to effectuate any of the purposes of his will or with a view to the advantage of his estate or the more convenient division thereof among the persons entitled thereto, should in their discretion find it necessary or expedient so to do, to sell his said estates, and he directed his trustees to stand possessed of the moneys to arise from the execution of the said trusts and of the proceeds of conver- 'sion of his residuary personal estate upon trust, in the events which

(1) (1879) 4 App. Cas., 692. (2) (1909) 9 C.L.R., 425, at pp. 438, 441, 444, 446.

' probate of this will was granted to the testator's daughters

vina and Hester - the other executor named in the will having 'At the time of his death testator's real estate consisted of (a) k situate in Grote Street, Adelaide, referred to as the Grote Stn property, (b) property known as " Marino," and (c) See. ' Hundred of Noarlunga.

On 18th December 1882 Charles Cameron Kingston agreed }

Apparently no part of the purchase-money was paid, but Cameron Kingston remained in possession of the property, a 31st December 1888 accepted from the executrices a lease ther at a rental of £4 a week determinable by the lessors at a montl notice. On 17th January 1889 Charles Cameron Kingston mortge his share under his father's will to the executrices to secure the pi ment of £12,375 admitted to be owing by him under the agreement 1882. The mortgage contained a covenant for payment of this with interest at 7 per cent., and a recital that it had been agreed tl Charles Cameron Kingston should give up possession of the @ Street property and relinquish all claim thereto under his agreen for purchase and that the executrices should be at liberty that property, crediting the net proceeds of sale to Charles Ca men Kingston in reduction of his debt of £12,375. Charles Came Kingston, however, remained in possession of the Grote property apparently paying little or nothing by way of interest.

In the year 1883 Strickland Gough Kingston had mortga;

Kingston. In 1896 Roberts transferred the mortgage to Nathal Alexander Knox, who took it as trustee for Mrs. Lucy Kingston

now the beneficial owners under her will of her share in her father

estate. On 28rd April 1897 Charlotte Giles, another daughter of the im

testator, was appointed trustee of his estate jointly with Ludovina Kingston in place of Hester Kingston deceased. On 2: 1898 the trustees of the will gave Charles Cameron Kingston notice

to quit the Grote Street property on 26th December then next.

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."

Before the date of this agreement both Charles Cameron and his wife had complained of acts of waste committed or permit by the trustees in connection with "Marino." Mr. Natl Alexander Knox appears to have been made a party to this ment as the assignee from Roberts of the mortgage over Strickl: Gough Kingston's share which he held as security for an adv made by him. This agreement was the result of negotiations whiel were brought about by the action of the trustees in advertising the Grote Street property for sale. The negotiations were conducted by Mr. Gall as solicitor for the trustees, Mr. McLachlan as solicitor r Charles Cameron Kingston, and Mr. Nathaniel Alexander Knoy himself a solicitor, representing the share of Strickland Gough Kingston of which, subject to a charge in his favour, Mrs. Luey Kingston was the mortgagee and, in all but name, the benefieis owner.

On 6th June 1899 a certificate of title under the Real Property Ac 1886 was issued to the trustees Ludovina Kingston and Charlo Giles for the whole of the land comprised in the property known a " Marino " pursuant to an application made by them on 21st Decem ber 1898 to have the land brought under the Act.

Mr. and Mrs. Charles Cameron Kingston having refused to

1899 instituted proceedings in the Supreme Court against Mr. and Mr Charles Cameron Kingston and Nathaniel Alexander Knox for sp performance. By his statement of defence Charles Cameron Kit ston set up that the agreement of 10th April 1899 was a breach of trust, and that the making by the plaintiffs of the said agreement was a breach of trust by them, and gave particulars as follows: "The plaintiffs have committed and permitted prior to making h said alleged contract great waste to the Marino property (nea 1 in the said claim) and the plaintiff Ludovina Cameron contrary to the trusts of the will of Sir George Strickland 7 used for her own benefit and permitted the use of large sums

money belonging to the estate of the said George Strickland King- ston and the plaintiffs were personally liable for such waste use and

from such personal liability in consideration of trust property in H. C. or 4.

the estate and was and is a breach of trust and the plaintiffs are unable to sell convey and make a good title to the property agreed to be sold unless with the consent of all beneficiaries under the said will including the children of Strickland Gough Kingston deceased which consent has not been obtained." The plaintiffs thereupon applied for an order under Order LXIX. of the Rules of Court 1893 giving them the relief claimed; and on 1st August 1899 Boucaut J. ordered that it be referred to the Master to inquire and report " whether the infant children of Strickland Gough Kingston deceased are interested in the agreement for compromise sought to be enforced in this action and if so whether they are benefited or prejudiced thereby and how; also whether any and what other parties (if any) are necessary parties to this action in respect of Miss Hester Holland Kingston's share in the estate of 'the late Sir George Strickland Kingston deceased. Also whether in event the interests of the said infants require that possession of 4 he Grote Street property in the claim referred to shall be given up by the defendants Charles Cameron Kingston and Lucy Kingston

• to the plaintiffs."

_ On the inquiry before the Master all parties were represented by

counsel. Mr. Gall gave evidence, and was cross-examined by counsel for Mrs. Kingston, for the purpose of establishing that the agreement

was a breach of trust, and the circumstances surrounding the making of the agreement were investigated. Evidence was led to show that

the agreement was for the benefit of the present appellants, and that

full consideration was being given for " Marino." Evidence was also given that Charles Cameron Kingston was hopelessly insolvent at the date of the agreement ; and there was some evidence as to the value of the several properties. Counsel for Charles Cameron Kingston argued that the present appellants should be separately represented in respect of Hester's share in the estate, and counsel for Mrs. Kingston insisted that the agreement was a breach of trust and could not be enforced. The Master, however, reported as follows : - * (1) Molly and Dorothy the infant children of Strick- land Gough Kingston deceased are interested in the agreement for compromise sought to be enforced in this action they being

• presumptively interested in the estate of the late Sir Geor

• Strickland Kingston by virtue of the will of the late Hester Hollan

_ said agreement. (3) No parties are necessary to this action it

Kingston deceased. (2) The said infants are benefited by the

respect of the said Hester Holland Kingston's share in the s estate. (4) In any event the interests of the said infants require that possession of the Grote Street property in the claim referred to should be given up by the defendants Charles Cameron Kingston and Lucy Kingston to the plaintiffs."

The matter then came on before Boucaut J. on the Master's report, Counsel appeared for the plaintiffs and for the defendants . Cameron Kingston and Nathaniel Alexander Knox, who had filed s ub. missions to the judgment of the Court, and Mrs. Kingston appeared it person and strenuously opposed a decree for specific performance. 24th October 1899 Boucaut J. made a decree, the material portio of which is as follows : - ' This Court doth find that the agreemen dated the 10th day of April 1899 in the plaintiff's claim set fort ought to be specifically performed and carried into execution a (the plaintifis on their part undertaking to perform and out the said agreement) doth decree the same accordingly and Court doth further order as follows: - (1) That the defend Charles Cameron Kingston and Lucy Kingston do within fo

tiffs possession of the Grote Street property in the plaintiffs' clain mentioned. (2) That the defendants Charles Cameron Kingst

will of Sir George Strickland Kingston deceased or otherwise ho soever in respect of the estate of the said Sir George Strickl Kingston deceased. (3) That the defendant Lucy Kingston pay the plaintiffs the sum of £270 in cash on transfer to and posse by her of the Marino property mentioned in the plaintifis' cla subject to the existing mortgage thereon and Regan's tel thereof and Sec. 489 Hundred of Noarlunga subject to lease J. Westcombe." On 13th March 1900 leave was given to plaintiffs to proceed on this decree.

On 27th April 1900 the trustees executed a memorandum

"transfer under the Real Property Act to Mrs. Lucy Kingston of the H. ©. or A.

lands comprised in " Marino," which was registered on 29th May io and the Public Trustee as administrator of Mrs. Lucy King-

" ston's estate is now the registered proprietor of those lands. On 3rd x :x¢srow.

May 1900 the trustees by deed conveyed to Mrs. Lucy Kingston Sec. 4894 Hundred of Noarlunga, and on 5th May 1900 the matter was completed by the execution by Charles Cameron Kingston and Mrs. Lucy Kingston of the release provided for by the agreement. The appellants on 21st February 1920 brought this action against the present trustee of the will of Sir George Kingston and

the Public Trustee as representative of Charles Cameron Kingston and Lucy Kingston, claiming a declaration that the agreement of 10th April 1899 was a breach of trust and is not and never was bind- pg on them and that "Marino" and Sec. 4894 formed part of estate of Sir George Kingston and consequential relief. The ion was tried before Angas Parsons J., who held that the appel- had failed to establish any claim to relief and dismissed the ion. From that judgment this appeal is brought.

ie first question for consideration is whether the agreement of "10th April 1899 was a breach of trust. The trustees of the will held "Marino" and Sec. 489a on the trust for sale set out above. 'The plaintiffs contend that the transaction in question was not a due execution of the trusts of the will. Counsel for the defendant McCarthy attempted to support the transaction as being either (a) a sale authorized by the trust for sale, or (b) an appropriation of these properties in satisfaction of the share of Strickland Gough Kingston under the will, or (c) a compromise or settlement of the claim of Mrs. Luey Kingston as assignee of the share of Strickland Gough Kingston which the trustees were empowered to make by sec. 21 of the Trustee Act 1893.

In my opinion the transaction cannot be supported on any of these grounds, The agreement was expressed to be and was in fact an agreement to settle family differences. It appears from the case 'submitted for counsel's opinion that, in taking steps to enforce it, and presumably in entering into it, the trustees were actuated by the desire to avoid accounting and all questions which might be raised as to waste or breach of trust in not having forced a sale

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

The next point raised by Mr. Cleland was that, even assum t

the judgment of the Court in the action for specific performan It is true that in that action the question of breach of trust was ral by the pleadings; and I think Boucaut J. must be taken to hi

decided either that the agreement was not a breach of trust or that,

_ if it was, the Court had power nevertheless to authorize the trustees to carry it out. But the appellants were not parties to that action by representation or otherwise, nor was the estate of Hester Kingston,

under whom they claimed, represented ; and I know of no authority, and none was cited by counsel, which would justify this Court in

holding that in these circumstances the appellants were precluded by the judgment from raising in the action the issue whether the agree- ment of April 1899 was a breach of trust. The contention is opposed 'to the general principle that a transaction between two parties in judicial proceedings ought not to bind a third (Duchess of Kingston's Case (1) ), and to the maxim Res inter alios acta alteri nocere non potest. 1 think, therefore, that it is open to the appellants to assert in this action, notwithstanding the judgment in the former action, the transaction of 10th April 1899 was a breach of trust. But it does not follow that the fact that Mrs. Kingston was compelled y the judgment of a Court of competent jurisdiction to perform the eement may not be relevant to other questions raised on this

The next point raised by counsel for defendant McCarthy was that, en assuming the transaction of 10th April 1899 to have been a h of trust, the appellants, in order to succeed, must establish Mrs. Kingston knew all the facts necessary to make that trans- tion a breach of trust. Assuming this proposition to he correct,

herself in March 1899, in correspondence with Mr. Knox, complained of the commission of waste by the trustees and threatened to take ps to have them removed on that ground, and the agreement itself provides for the release of the trustees from their personal liability for such alleged waste. Mrs. Kingston had professional advice before e signed the agreement which was submitted by her solicitor and e solicitor for her husband for signature by the trustees. More- over, Mr. Knox, who was trustee for her of the mortgage of Strick- id Gough Kingston's share, took part in the negotiations which up to the making of the agreement; and in these circum- ances it is impossible to avoid the conclusion that both he and Mrs.

• Kingston knew the facts which made the transaction a breach ¢

• trust.

The appellants have, in my opinion, established (a) that the tran action of 10th April 1899 under which Mrs. Kingston acquin " Marino " and See. 4894 was a breach of trust on the part of tl trustees, (b) that Mrs. Kingston had at that time notice of the tru and (c) that Mrs. Kingston and her trustee Mr. Knox knew the fae which made the transaction in question a breach of trust. It foll that they would be entitled, apart from any protection which m be afforded by the judgment in the action for specifie performar or by the provisions of the Real Property Act, to follow the tru property in the hands of the Public Trustee as administrator of Mr Kingston's estate, and to insist either unconditionally or on term on that property being administered in accordance with the ti r of Sir George Kingston's will.

With respect to Sec. 489a, which has not been brought un the provisions of the Real Property Act, the only question is whe the fact that Mrs. Kingston was compelled by the judgment in t former action to accept a conveyance of that land affords any ans
to the appellants' claim.

Before the making of the agreement of 10th April 1899 the app lants as beneficiaries under the will of Hester Kingston had an able title to her interest under the will of Sir George Kingston i lands dealt with by that agreement. The equitable title to the lands acquired by Mrs. Kingston under that agreement was, fore, subsequent in point of time to the equitabletitle of the ap] The judgment in the former action rested on the agreement, and ¢ no more than compe! Mrs. Kingston to perform the agreement she had made, and to accept the legal title to the land to which s had an equitable title under the agreement. Immediately upon t execution of the agreement her equitable interest in the la question under that agreement was subject to the equitable inter of the beneficiaries under Hester Kingston's will including the ap] lants. How then did the judgment operate to reverse that p 'The mere acquisition of the legal estate by Mrs. Kingston gav

no priority, for she had notice of the trust when she entered agreement. "The order of priority between . . . equitable

yr omission on the part of the owner of an equitable title prior in int of time, such as to cause that title to be postponed to a subse-

County Banking Co. (1) ). In Cory v. Eyre (2) Turner 1.J. says that this rule is founded on the principle that the creation of a trust vests in estate in the subject matter of the trust in the person in whose favour the trust is created ; and that, where it is sought to postpone

ton, under whom they claim, was represented a the action. There as, in fact, no act or omission of any kind on their part, and, as they e infants, it is difficult to see how they could prejudice their

s. Kingston was acquired with notice of the prior equitable est of the beneficiaries under Hester Kingston's will.

these circumstances I see nothing to justify the postponement F the prior equitable interest vested in the appellants to that quired by Mrs. Kingston under the agreement or to the legal estate quired by her under the subsequent conveyance.

In my opinion, therefore, the appellants are entitled to succeed n respect of Sec. 4894 Hundred of Noarlunga.

In respect of " Marino" it is necessary to consider the effect of he Real Property Act 1886.

_By see. 69 of that Act it is provided that the title of every regis- ered proprietor of land shall, subject to such encumbrances, liens, estates or interests, as may be notified on the certificate, be absolute nd indefeasible subject to certain qualifications of which one only eed be mentioned, namely : - ' In the case of fraud, in which case ny person defrauded shall have all rights and remedies that he would lave had if the land were not under the provisions of this Act:

(1) (1901) 2 Ch., 213, at p. 260. (2) (1862-63) 1 DeG. J. & S., 149, at p. 167.

is governed by order of time - unless there has been some act H.C. o A.

ent equitable interest " (per Stirling L.J. in Taylor v. London and xixesnon,

3 title of a registered proprietor who has taken bona fide for

Provided that nothing included in this sub-section shall af

consideration, or of any person bona fide claiming through or) him." See. 70 provides that in all other cases the title c registered proprietor shall prevail notwithstanding the exist any person of any estate or interest which but for the Act mig held paramount or to have priority. Sec. 71 provides that n in secs, 69 and 70 shall be construed to affect the rights of ao que trust where the registered proprietor is a trustee, whether trust be express, implied or constructive, provided that no un re tered estate, interest or trust shall prevail against the title « registered proprietor taking bona fide for valuable considerat Sec. 72 provides that knowledge of the existence of any um tered interest or trust shall not of itself be evidence of w bona fides so as to affect the title of any registered propri Sec. 186 is in the following terms : - ' No person contra: tin dealing with, or taking or proposing to take a transfer or other in ment from the registered proprietor of any estate or interest in' shall be required, or in any manner concerned to inquire int ascertain the circumstances under, or the consideration for, wi such registered proprietor or any previous registered propriete such estate or interest is or was registered, or to see to the apy tion of the purchase-money, nor be affected by notice direct or structive of any trust or unregistered interest, any law or equi the contrary notwithstanding." Sec. 187 excludes from

tection of sec. 186 any person who has acted fraudulently a party to fraud, but provides that contracting, dealing, ta proposing to take a transfer or other instrument with actual kt ledge of any trust, charge, or unregistered instrument shall no itself be imputed as fraud. Sec. 249 is in the following term "Nothing contained in this Act shall affect the jurisdictio the Courts of law and equity in cases of actual fraud 0 contracts or agreements for the sale or other disposition of or over equities generally. And the intention of this A¢ that, notwithstanding the provisions herein contained for pre ing the particulars of any trust from being entered in Register Book, and without prejudice to the powers of disp 0

ts and other rights arising from unregistered transactions be enforced against such proprietors in respect of their estate

may be enforced against proprietors in respect of land not under the provisions of this Act: Provided that no 8 UE MEU ER 1 estate,

cially the decisions in Assets Co. v. Mere Roihi (1), Butler Fairclough (2) and Wicks v. Bennett (3) - that the word " fraud" secs, 69 and 187 of the South Australian Act is to be construed as

the nature of personal dishonesty or moral turpitude. But T not find in either the New South Wales, the Victorian or the y Zealand Act any provisions corresponding to secs. 71, 72 and {9 of the South Australian Act, and it is on the true construction of hese sections that the controversy in the present case turns.

By force of the provisions of secs. 69 and 70 if they stood alone, Irs. Lucy Kingston as registered proprietor would, unless she had guilty of dishonesty in acquiring her title, have been protected t the unregistered interest of the appellants. But sec. 71 troduces an exception by providing that the protection afforded ) the registered proprietor by secs. 69 and 70 shall not extend to a

stered proprietor who is a trustee - express, implied or construc- so as to affect the rights of his cestuis que trust, unless such istered proprietor took the land bona fide for valuable considera- ; and sec. 72 excludes as evidence of want of bona fides mere knowledge of the existence of a trust or unregistered interest. Mrs. y Kingston by taking " Marino" with knowledge of the trust ame a constructive trustee of it. She is, therefore, within the eption enacted by sec. 71 (v.). But the question remains whether

(1) (1905) A.C., at pp. 211-212. (2) (1917) 23 C.L.R., 78. ' (3) (1921) 30 C.L.R., 80.

ther powers conferred by this Act on proprietors of land, all H- ©. or A.

interest therein, in the same manner as such contracts or rights j¢,yesron.

• she took " Marino" bona fide - admittedly she gave valuable *- sideration: and in considering this question knowledge of the exist:

ence of the trust or of the interest of the beneficiaries is not of i to be regarded as evidence of want of bona fides. Giving due weigh to this provision, I think the expression " bona fide " in sec. 71 must be construed as meaning " honestly," and as importing an abse: of dishonest intention on the part of the person becoming registerec

intention on the part of his vendor towards the persons entitled the unregistered interest. On this view of the meaning of secs. 71 and 72 I think Mrs. Lucy Kingston took " Marino " bona fide, a that when she became the registered proprietor she was within the protection of the proviso to sec. 71. It is true that when she took the transfer of "' Marino" from the registered proprietors she knew that they held the land as trustees and knew also facts which, in my opinion, made the agreement out of which the transfer arose a breach of trust. She participated in the breach of trust committed by the trustees in entering into the agreement. But, having entered int the agreement, she refused to perform it until compelled by the judgment of the Supreme Court in the action for specific performance. - Having regard to the proceedings in that action, to the part taken by Mrs. Kingston as a defendant, and to the fact that after an exhaus tive inquiry the Master found that the transaction was beneficial to. the appellants - and inferentially to the trust estate - I think it is impossible to hold that Mrs. Kingston acted otherwise than honestly and bona fide in taking the transfer of " Marino."

Apart altogether from secs. 71 and 72 I think that in respect of " Marino " Mrs. Kingston was within the protection of secs. 186 and 187 of the Act as transferee from the registered proprietor. In the circumstances above referred to she cannot be said to have " acted fraudulently or been a party to fraud " within the meaning attributed to the word fraud by the decisions to which I have referred. It was, however, argued for the appellants that the protection afforded by these sections was withdrawn by the provisions of sec. 249 of the Act. I cannot assent to this contention. The section is clumsily expressed; but I think it is reasonably clear, especially having regard : to the terms of the proviso, that it was designed to do no more than |

insure the preservation against a registered proprietor of rights or H. ©. or A.

equities affecting the land which came into existence after he had

been registered as proprietor, and would, if the land had not been "under the Act, have been enforceable against him at law or in equity.

Tn effect, it appears to be a statutory adoption of the decision in

Cuthbertson vy Swan (1), which overruled the decision in Lange v. _ Rudwolt (2). In any event, I think it is clear that the word " sub- sequent " in the proviso can only be read as applying to a transfer, &c., subsequent in date to the creation of the unregistered estate, interest, contract or agreement, and, reading it thus, Mrs. Kingston taking bona fide for value by transfer made after the creation of the equitable interest of the appellants is within the protection of the proviso. As to " Marino," therefore, the appeal, in my opinion, fails.

The question how the costs of the litigation in the Supreme Court and in this Court are to be borne remains to be dealt with. The plaintiffs have succeeded in part and failed in part; the property in respect of which they have succeeded is of small value com- pared with that in respect of which they have failed. A breach of trust resulting in considerable loss to the trust estate was com- mitted by Ludovina Kingston and Charlotte Giles, the former trustees of the will: Ludovina's estate is not represented in this action. Both these ladies and Lucy May Kingston, who participated in the breach of trust, and whose estate is represented in this action by the Public Trustee, acted under the direction of the Supreme Court in carrying out and giving effect to the transaction which is now held to be a breach of trust, and Mrs. Lucy Kingston was compelled by the decree in the former proceedings to complete that transaction. Under these circumstances I think the proper course is to make no order as to the costs of the action or of the appeal except that the plaintiffs are to have their costs of the action and appeal out of the estate of Sir George Kingston.

Hicews J. At the date of the agreement, 10th April 1899, the position was that the five children of Sir George Kingston were entitled under his will, each to one-fifth share of the net proceeds of the sale, conversion and collection of his real and personal estate.

(1) (1876-77) 11 S.A.L.R., 102. (2) (1872) 6 S.A.L.R., 75.

H.C.or A. The children were Ludovina, Hester, Charlotte, Strickland and - ee Charles. Ludovina and Hester as executors had proved the will in-

Krxasrox. (Who was married to Mr. Giles) had been appointed in place of Hester

1884. Hester had died in 1893; and on 23rd April 1897 Charlotte

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.

et and certain land, including a seaside residence thereon, at "Marino," and Sec. 4894 Hundred of Noarlunga. Both Grote 'Street and " Marino" had been mortgaged by the testator ; and at the date of the agreement the amount owing by the estate under the mortgages on Grote Street was £3,000 and on " Marino " over £500. harles Kingston had accused the trustees of waste as to '* Marino," letting the place as a cow-yard, piggery, &c.

Tam stating such only of the complicated facts as seem to me to be material. The persons interested in the estate on 10th April 1899 were, therefore, (1) Ludovina; (2) Ludovina as Hester's executrix ; (3) Charlotte; (4) the widow and two infant children of Strickland, as to Strickland's share, but subject to a mortgage jow held by Lucy Kingston for over £10,000 with interest and half- early rests; (5) Charles, but subject to his debt to the trust estate £21,486. As values stood at the time, Grote Street was treated worth, if free from encumbrances, about £5,000, and " Marino " worth about £1,500. It is obvious that the equities of redemption, s to the interests of Strickland and Charles under the will, seemed be worth nothing, but the interest of Hester, and, therefore, of jose entitled under Hester's will, still remained.

_ Under these circumstances, the agreement of 10th April 1899 was made. It has been already set out in the judgment of the Chief Justice.

It will be noted that the agreement is not described as a purchase, but as an agreement "in order to settle family differences." Lucy Kingston was, under the agreement, to take " Marino " and Sec. 4894 Noarlunga subject to the mortgage for £550; to pay £270, to telease the trustees (Ludovina and Charlotte) from all claims under the will of the testator or otherwise in respect of his estate. This release would cover the claim for past rents as to " Marino" and a aim for moneys of the estate alleged to have been used by the trustees for their own benefit ; but it would also release the trustees from accounting to Lucy Kingston in respect of the share of Strick- land in the estate, and from accounting in respect of the share of tharles. It is obvious that the release given by Charles and by his wife would only apply to the interest of Strickland (to the extent of

The principal properties in the estate of the testator were Grote H.C. of A.

the mortgage thereof held by Lucy over that interest), and to t interest of Charles subject to his mortgage to the trustees. ( great object achieved by the trustees was that the Charles stons were to leave Grote Street, and thus enable the trustees t sell the property to the best advantage. On the other hand, th trustees were to release Charles from all claims - claims for his la mortgage debt to the trustees - and for arrears of rent ; Charles y to have the estate books at Grote Street, and any other pei sonal property of the testator there; an advertised sale of Grote Sti was not to take place till after 21st May following ; and the truste

a half-year's notice, &e. At the time of the agreement it is clea that the equity of redemption in Strickland's share, to which Strie land's wife and infant children were entitled as part of his es as well as the equity of redemption in Charles's share seemed, as th values then stood, worth nothing ; but the "* Marino" property ha increased since very considerably in value. 4

Now, the agreement between the trustees and the Kingstons not a sale of "* Marino" within the powers of the trustees under Si George Kingston's will. There was a trust to sell; but a sale mean a transaction for money payment; and this agreement was no sale of " Marino," or of Sec. 4894 Noarlunga. It was, as expt in the agreement itself, an agreement ' to settle family difference and it covered considerations quite different from money payments. It is not pretended that the £270 to be paid by Lucy was treated : the money value of " Marino" ; it was only a payment in a to the other considerations for the transfer. The whole of considerations on one side have to be taken as against the whole of the considerations on the other; it is impossible sever that portion of the agreement which relates to " Marino' from the agreement as a whole. The agreement was, to say th least, a breach of trust on the part of the trustees; and it i not binding on those who were not parties to the agreement

entitled to Strickland's share subject to his mortgage liability ; what is more important, not binding on the plaintiffs who ¥ entitled, after the deaths of Ludovina and Charlotte to the corp us

of the estate of Hester. These children of Strickland, the present H.C. oF A-

intifis, were entitled to that corpus, but not entitled in possession

itil the death of Charlotte; and the death of Charlotte did not take place until 30th May 1913. The plaintiffs have taken out administration to the estate of Strickland, their father, and the plaintiff Mrs. Stuart is the administratrix of the estate of Hester also. What then is the position on these facts? The plaintiffs are entitled to have the trusts of the will of Sir George Kingston carried into execution. Prima facie, they are entitled to inquiries and accounts as to the estate, to realization of the estate, and payment of what is due to Hester's share, as well as to payment of anything that

may remain after the mortgage in respect of Strickland's share. If, however, it be found that " Marino," for any of the reasons urged by counsel for McCarthy (who has been added as a defendant to repre- sent those interested in Lucy Kingston's estate) cannot be recovered from that estate, the trustees who concurred in the transfer of "Marino " (Ludovina and Charlotte) are liable, jointly and severally, for the value of " Marino" as it stands to-day. This liability of the tees must not be forgotten ; although, as the estates of the two trustees, who were parties to the agreement of 10th April 1899, are treated as worthless, the chief stress of the argument has been

naturally laid on the right to recover "' Marino" from Mrs. King- _ ston's estate. The position taken up in the statement of claim is that the agreement was a breach of trust, and is not and never was binding on the plaintiffs (par. 1 of the prayer). There is also a prayer that the agreement should be delivered up to be cancelled, but this is not strictly a proper mode of relief, from the point of view of the plaintiffs. Whether the agreement is binding or not as between the two trustees who were parties thereto and the King- stons does not really concern the plaintifis: the position is that it is not binding on the plaintiffs; and the judgment should, in my opinion, be on the basis that the plaintiffs are entitled to execution of the trusts notwithstanding the agreement. The trustees of 1899 transferred " Marino " to Mrs. Kingston without any authority to do so under the trusts; and the usual consequences follow - * Marino ~ must be restored, or, if the trustees cannot get it restored, they must account for its value. It is true that the trustees are dead; but the

• defendant Kathleen Pittar Kingston is sued as the sole surviv °3- executrix of Charlotte, who was the sole surviving trustee of s :

George Kingston, and Charlotte's estate is liable. It appears tha the same defendant has also been appointed the trustee of Sir George Kingston, so that there is nothing to hinder the execution of trusts of Sir George Kingston, so far as they remain to be executed, So far, there is nothing to prevent an order directing the defendan the Public Trustee, who is the"administrator c.t.a. of Mrs. Kingston's. estate, as well as the administrator of the estate of Charles left unadministered, to retransfer "' Marino" to the trust estate, with all its increment of value.

But there are two main objections raised on behalf of Lue Kingston's estate - (1) under a judgment in an action of 1899; (2) under the Real Property Act.

(1) The trustees, Ludovina and Charlotte, issued a writ on 4 July 1899 against Charles and Lucy Kingston, claiming specific formance of the agreement of 10th April 1899. Knox, as tru for Mrs. Kingston of the assignment of mortgage of Strickland's shar in the estate and as one of the signatories of the agreement, was joined as a defendant to that writ ; but there was no representati of Hester's estate, or, indeed, of Strickland's estate, or of the infan children of Strickland, the present plaintiffs. As is proper in specific performance action, the proceedings were confined to th parties to the agreement. By the judgment of Boucaut J. (24th October 1899) the defendants were ordered to specifically perform the agreement; Charles was ordered to give up possession of Grot Street ; Charles and his wife Lucy were ordered, in accordance wit clause 4 of the agreement, to release the trustees from all claims under the will of Sir George Kingston; Lucy was ordered to pay to the trustees the £270 on transfer to and possession by her of " Marino" subject to the existing mortgage of £550, and Charles and Lucy were ordered to pay the trustees' costs of the action. But, of course, this judgment, though binding on Charles and his wife, was not in any way binding on Hester's estate, or as to any possible equity of redemption as to Strickland's interest. A judgment is not binding on any person other than the parties to the judgment or their privies in estate; and this judgment, though it involved the transfer 0

of those interested in Hester's share or in Strickland's ultimate quity in his share. The position is that Hester's administrator

• (the plaintiff Mrs. Stuart is now Hester's administrator) and Hester's _ beneficiaries (the two plaintiffs are now the beneficiaries entitled to Hester's interest, under her will) are entitled to have the trusts of the will of Sir George Kingston carried into execution as if the agreement did not exist. If " Marino," apart from the agreement and the judgment for the specific performance thereof, has not been validly transferred to Mrs. Kingston, it must be retransferred to the trustees of the estate of Sir George Kingston ; if it has been validly transferred to Mrs. Kingston, so that her administrator (the Public Trustee) cannot be compelled to retransfer it, the plaintiffs are, in

theory at least, entitled to make the trustees of Sir George Kingston's

estate who transferred " Marino" to Mrs. Kingston account for

the present value of "Marino." It is not necessary to consider whether the judgment was right or wrong; as there was no appeal, he judgment is binding on all the parties to the action ; but it is ot binding on the plaintiffs in this action as they were not parties "to the former action. The plaintiffs in this action can neither take the benefit, nor bear the burden, of the former action. The prin- ciple is fundamental in the administration of justice by British _ Courts, whether of law or of equity, that "no proceedings shall take place with respect to the rights of anyone except in his presence. Thus a decree of the Court of Equity binds no one who is not to be regarded . . . either as a party, or else as one who claims under a party to the suit" (Calvert on Parties in Equity, 2nd ed., ap: 2). It has been urged, indeed, that the trustees, Ludovina and Char- lotte, represented in the former suit the infants interested in Hester's Seeriate. This view is, in my opinion, obviously mistaken. The ; trustees, in enforcing the agreement, were enforcing, amongst other _ things, their personal interest as against the estate - including their interest in getting a release of their alleged liabilities for waste as to _ "Marino," and for improper use for their own purposes of the moneys of the estate; and they were enforcing the agreement which _ Was made, as stated therein, " in order to settle family differences "

_ "Marino" to Mrs. Kingston, does not in any way affect the rights H- ©. or 4.

. - differences with the Charles Kingstons. The transactions tl ' subject of the agreement enforced included transactions be

the trustees having certain alleged personal liabilities on the 0 side and only two persons interested in the trust estate on the oth The old rule of Chancery that all persons interested must be parti so as to be bound by any decree has been relaxed of recent years by certain Acts and Rules; but these Acts and Rules prescribe limits of the relaxation; and there is no pretence for saying any Act or Rule applies to this case so as to make the plainti bound. As Farwell L.J. stated in Brydges v. Brydges (1), " the Court has no jurisdiction, inherent or otherwise, over any persot other than those properly brought before it as parties or as person treated as if they were parties under statutory jurisdiction (eg persons served with notice of an administration decree or in the sam interest with a defendant appointed to represent them), or pers coming in and submitting to the jurisdiction of their own free w to the extent to which they so submit (e.g., creditors of a bankrupt executor, who has carried on business under a power in the w coming in to claim against the testator's estate in order to obtain subrogation to the executor's right of indemnity). But the Courts have no jurisdiction to make orders against persons not so bel them merely because an order made, or to be made, may or will b ineffectual without it." There is, indeed, a power, in certain cases, for the Courts to adjud cate without making some persons interested parties ; but the absent parties are not bound by the judgment (Doody v. Higgins (2) ). Under the South Australian Rules of Court 1893 there is also a special provision under the head of '' Administration and Trusts" anc relating to originating summonses (Order LX XIII, r, 14): " Where a compromise is proposed between some of the beneficiaries under trust, or some of the persons interested in the estate of a decea

person, and a trustee executor or administrator sought to be charg the Court or a Judge may, if they or he consider the compromise to be for the benefit of all such beneficiaries and persons who are concerned, order that the compromise shall be binding upon a of such beneficiaries or persons who are not before the Court."

(1) (1909) P., 187, at p. 191. (2) (1852) 9 Ha., App. xxxii.

But in the first place, this provision, though applicable to proceed-

able to specific performance suits. The rule relates only to es against trustees. In the second place, such an order, ex- ssed to be binding on the beneficiaries not before the Court, was not made by Boucaut J. It is true that by an order of that armed Judge, made on Ist August 1899 - (we have not been shown that there was any power to make such an order, particularly in a specific performance suit) - it was referred to the Master to inquire and report as to the infants' interests ; and that the Master reported at the plaintiffs, the infant children of Strickland, were interested in the "agreement for compromise" then sought to be enforced, interested by virtue of the will of Hester; that the infants were benefited by the agreement; and that no parties were necessary to the action in respect of Hester's share ; and that in any event the interest of the infants required the possession of the Grote Street property to be given up by Charles and his wife to the plaintiffs. But counsel have not suggested that any Act or Rule of South Aus- tralia makes this finding in any way binding on the plaintiffs. The former action still remains an action to which the plaintiffs were not arties, and the judgment remains a judgment which is not binding on the plaintifis.

(2) But there is claimed for the estate of Lucy Kingston the pro- ection of the Real Property Act 1886, which expresses the South Australian Jaw as to the Torrens system of registration ; and this is by far the most serious contention. In pursuance of the agreement of 10th April 1899, and of the judgment in the action for specific performance of that agreement in 1899, "' Marino " to Lucy Kingston, and she became registered as proprietor (29th May 1900); and Sec. 489a Noarlunga was conveyed to her under the old law on 3rd May 1900. The question is, as to "' Marino," does the fact that Lucy became registered proprietor make her title thereto indefeasible and unimpeachable, even though the plaintifis have been wronged. The defendant, the Public Trustee, as her administrator ct.a, became registered proprietor 21st August 1920. The answer depends on the South Australian Real Property Act 1886.

The Torrens system of registration of titles to land was first

adopted in this very State of South Australia; and it has copied, with variations, in all the States of Australasia and in C: in the Malay States, and elsewhere. The objects, as stated in 10 of this Act, are "to simplify the title to land, and to facilit dealing therewith, and to secure indefeasibility of title to all tered proprietors, except in certain cases specified in this 4 Text-writers seem to treat the system as one consistent syst everywhere, and the decisions under the Acts in one country a applicable to other countries; but it has to be remembered decisions under the analogous Acts elsewhere must yield here to t words of the South Australian Act. We have to apply the Soutl Australian Act, and that Act only. It is urged before us that Luey Kingston's title as registered proprietor of " Marino " prevails oy the interests of all the other persons interested under the will of George Kingston. That is to say, even though Mrs. Kingston

taking land in which the plaintiffs were interested as well as all other beneficiaries under Sir George Kingston's will - her title ca be disturbed. This argument makes it necessary to consider th Act very closely. The argument does not apply to See. Noarlunga, which is under the old law.

Before examining the Act, however, I should say that it is, in opinion, quite clear that Mrs. Kingston had, at the time of the tra to her of " Marino," all the knowledge to which I have refer The whole of the position as to the interests in Sir George King ston's estate was set out in the statement of claim in the a of Kingston v. Kingston. Mrs. Kingston did not put in defence ; but she gave evidence personally before the learned Judg and argued before him, and did not in the least dispute any of the allegations made by the plaintiffs in that action. Her husband h d put in a defence, not denying any of the allegations in the statem ent of claim, but submitting that the agreement was in breach of trus He alleged the waste on the part of the trustees as to " Marinc the use of moneys of the estate by the trustees for their own benefit

from their personal liability in consideration of trust property, Marino," in the estate, and that the plaintiffs were unable to make _ a good title to " Marino" * ficiaries under the said will including the children of Strickland Gough Kingston deceased, which consent had not been obtained." _ Mrs. Kingston was represented before the Master by counsel, who "took on her behalf the same objection as was urged by Charles King- 'ston. The agreement itself was prepared by a solicitor for Mrs. Kingston (Mr. Stow) and by a solicitor (Mr. McLachlan) for Charles "Kingston and Knox ; it was brought round by these solicitors to the solicitor for the trustees at 10 o'clock one night, and was signed the "next morning. The agreement was in fact proposed by Charles and _Luey Kingston and accepted by the trustees. It is not necessary to attribute to Mrs. Kingston the knowledge which her husband had, as a matter of mere probability ; for the actual knowledge is clearly brought home to her and her solicitor. The knowledge of the solicitor s to be treated as knowledge of the client (Rolland v. Hart (1) ).

Now, secs. 186 and 187 of the Real Property Act 1886 do not, in my opinion, protect Mrs. Kingston or her estate from the claim of the plaintifis to get back "' Marino" to the estate of Sir George Kingston. These sections provide for the protection of persons q dealing with a registered proprietor. They protect persons to whom 'title moves from the registered proprietor ; whereas secs. 69-72 pro- tect the registered proprietor himself, statically. Sec. 186 provides that "no person contracting or dealing with, or taking or proposing to take a transfer or other instrument from the registered proprietor of any estate or interest in land, shall be required . . . to inquire into . . . the circumstances under . . . which such regis- tered proprietor . . . was registered, . . . nor be affected _ by notice direct or constructive of any trust or unregistered interest." It _ isenough to say that when Mrs. Kingston contracted with the trustees, 10th April 1899, the trustees were not "registered proprietors." The land was not brought under the Real Property Act at all, in the trustees' names or otherwise, until 6th June 1899 - after the agreement was made. Mrs. Kingston, therefore, in contracting

stated that the agreement provided for a release of the trustees 4 ©. or A.

• and dealing with the trustees by the agreement was not contract ' ing or dealing with them as registered proprietors; for they

_ proposing to take" the transfer apart from the agreement.

not then registered proprietors, and there was no " taking or

187 says that sec. 186 "shall not protect any person who ha acted fraudulently or been a party to fraud, but the contra or dealing, or taking, or proposing to take a transfer actual knowledge of any trust, charge, or unregistered instrum shall not of itself be imputed as fraud." This section quali sec. 186; and, as sec. 186 does not apply to the case, sec. 187 doe not; and if Mrs. Kingston or her representative is to succeed it holding this land, it must be by force of some other section, i

But secs. 69-72 have also to be considered. Under see. 69 thi title of eve

y registered proprietor is absolute and indefeasible, sub

ject to certain qualifications. One is " in the case of fraud, in whiel

case any person defrauded shall have all rights and remedies that

Act: Provided that nothing included in this sub-section shall the title of a registered proprietor who has taken bona fide for valuabl consideration, or any person bona fide claiming through or und him." It may be that this provision applies only to persons who ik bona fide from the person who has been registered by fraud to whiel that person was a party; for otherwise the proviso seems to b unnecessary and unmeaning; and this view is strengthened by consideration of "qualifications" m., m., vt, vi. But I assume, in favour of the defendants, that this view of sec. 69 is in missible. Sec. 71, however, excepts from the operation of sec. 6! the operation of the law as to trusts: " Nothing in the two precedin sections" (secs. 69 and 70) "contained shall be construed so as t affect any of the following rights or powers, that is to say, . The rights of a cestui que trust where the registered proprietor trustee, whether the trust shall be express, implied, or constructive.'

Now, Mrs. Kingston, acquiring for value " Marino," which ¥ subject to a subsisting trust, became, according to equitable pri ciples, a trustee of " Marino " for the purposes of the trust, bee she had notice of the trust (Saunders v. Dehew (1), Rolfe v.

(1) and other cases cited in Halsbury's Laws of England, vol. 1. ©. oF A-

m., p. 88). This doctrine was one of three grounds on which e Judicial Committee decided Loke Yew v. Port Swettenham

ubber Co. (2). There is nothing in secs. 69-72 to qualify this jyxdsrow.

tule as to trusteeship. There seems to be some difference of opinion as to the propriety of calling the trust " express " or "' constructive" which is imposed on the taker of the property (Barnes v. Addy (3) ;

Soar v. Ashwell (4); In re Dixon; Heynes v. Dixon (5) ); but sec. 71 covers both kinds. There is, however, a proviso to section 71 : "Provided that no unregistered estate, interest, power, right, con- tract, or trust shall prevail against the title of a registered pro- prietor taking bona fide for valuable consideration, or of any person bona fide claiming through or under him"; and sec. 72 says "Knowledge of the existence of any unregistered estate, interest, contract, or trust shall not of itself be evidence of want of bona fides so as to affect the title of any registered proprietor." It is to be noticed that the word "fraud" is not here used. I rather infer from the difference in language between secs. 71 and 72, and secs. 186 and 187, that the Act did not mean to give to a regis- tered proprietor who has taken under circumstances which would make him ordinarily a- trustee the same impregnable position as is given by secs. 186-187 to persons contracting with a registered proprietor. The Legislature, probably, meant to draw some dis- netion between fraud to which the transferee from the registered pm oprietor is an active party, and want of bona fides, as where a person becomes registered proprietor through a dealing which must, to his knowledge, do wrong to an outsider. If the dealing is such that it may do such wrong, there is not necessarily want of bona fides; as the person who becomes registered proprietor may be entitled to assume that the party with whom he is dealing will do what is just to the outsider. I adhere to what I said in Wicks v. Bennett (6) on this subject, and as to the case of Oertel v. Hordern (7), under the New South Wales Act.

But I shall assume, again in favour of the defendants, that the

(1) (1864-65) 4 DeG. J. & S., 576. (5) (1900) 2 Ch., 561.

(2) (1913) A.C., 491, at p. 505. (6) (1921) 30 C.L.R., at pp. 94-95.

(3) (1874) LR. 9 Ch., 244. (7) (1902) 2 S.R. (N.S.W.) (Eq.), 37. (4) (1893) 2 Q.B., 390.

want of bona fides referred to must amount to actual fraud. 72 merely says that knowledge of the existence of any trust sh not of itself be evidence of want of bona fides; but such ledge combined with the nature of the transaction and other ¢ cumstances may amount to "want of bona fides," or to fr But, whatever may be the true effect of secs, 69-72, I find here ac fraud in the agreement - fraud to which Mrs. Kingston was an ; party. For my part, I am unable to call a transaction any but fraudulent where, as in this case, trustees discharge claims ma against them personally by transferring to the claimant a po ti of the trust estate, or where (taking another aspect) the cla

• a beneficiary under the trust - induces the trustees to convey her an asset of the trust, as well as to release her husband from hi debt to the trust, in consideration of her releasing the trustees fro

this view. I cannot accept it. A bank clerk is guilty of fraud he take money from the till, intending to return it, and not inte f to injure the bank. In Rolfe v. Gregory (1) G. borrowed money fro B. and gave B. a promissory note for £600 with interest ; B., by h will, gave the debt to 8. for life and to her children afterwar and made R. his trustee. R. became indebted to G. ; and, in dischar, of his debt, delivered the note to G., and got credit from G. for principal and interest due on the note. It was held by Lord We bury that this was fraud on the part of R. to which G. was a and that even lapse of time did not prevent S. and her children fro recovering the £600 from G. (see also M'Leod v. Drummond (2) As Grant MLR. said in Hill v. Simpson (3), " it is not just, that ¢ man's property should be applied to the payment of another man's debt." In that case, bankers took a security from the exe over stock of the testator to secure the executor's own debt.

executor to be entitled to the stock under the will; but the Mast

(1) (1864-65) 4 DeG. J. & 8., 576. 17 Ves., 152. 2) (1805-07) 14 Ves., 353; (1810) (3) (1802) 7 Ves., 152, at p. 169.

the Rolls said it would be " direct fraud " if they knew that the H.C. or A.

belonged to the wife, not to the executor. There is also much

n favour of the view taken by Stavvell C.J. of the similar exception

of "fraud" in the Victorian Act: as the section "is to a great

• extent restrictive of the rights of persons at law and in equity it : should, I think, be construed strictly, and the exception liberally ; e word ' fraud' there means fraud on the part of either party, and not necessarily of both." But to my mind, there is no need to balance the provisions of the Act so finely - the fraud here is so direct and obvious. A bona fide dealer for value with trustees as to land of the trust would surrender to the trust estate money or other valuable consideration as an equivalent for the land transferred to him; whereas here Mrs which she gave for "J would increase the trust estate - makes the trust estate pay for what

the trustees transfer to her. It was actual fraud - dishonesty - on e part of the trustees to get rid of their personal liabilities to the te, to close the mouth of the person impugning their conduct of the trust, by agreeing to transfer and transferring to that person

• of the property of the estate; and that person participates in the fraud by concocting such an agreement and urging it on the

• There was more here than a mere knowledge on the part of Mrs. Kingston of the existence of some unregistered interest or trust behind the trustees, an interest or a trust which did not con- cern her; she was interested herself under the trust, and induced the trustees to give her an advantage which was unfair to the plain- 'tiffs. The trustees and Mrs. Kingston are dead; and it is a relief 'to be able to say that there is no evidence of any deliberate motive _to injure the infant children of Strickland. The motive of the parties was chiefly to get rid of their own burdens, but by means of what Was in fact, as they knew, a fraud on the children. But, just as in the case of a fraudulent statement in an action for deceit, " if fraud be proved, the motive of the person guilty of it is immaterial. It

itters not that there was no intention to cheat or injure the person

whom the statement was made " (per Lord Herschell in Derry v. Peek (1); and see per Lord Cairns in Peek v. Gurney (2) ). The ' (1) (1889) 14 App. Cas., 337, at _p. 374. (2) (1873) L.R. 6 H.L., 377, at p. 409.

intentional misappropriation of property in which others interested, for the mutual benefit of the trustees and the Kings

position in its naked delinquency or not, whether committed persons of keen minds or of dull: and yet it has to be remember that in this case all parties acted under the guidance of solicitor and that Charles Kingston was himself a solicitor. Crescit orbe dolus, and it may be impossible to give a final definition of th fraud; but this case comes within the words of Romilly MLR. i Green v. Nivon (1): "Fraud is the same in all Courts, but s expressions as 'constructive fraud' are . . . inaccurate;" "*fraud' . . . implies a wilful act, on the part of one, wherel another is sought to be deprived, by unjustifiable means, of what is entitled to.' The knowledge of Mrs. Kingston's solicitor, M Stow, must be treated as Mrs. Kingston's knowledge, and it is no pretended that he did not know the rights of the beneficiaries under Sir George Kingston's will and the effect of agreement. Mr. Stow, the solicitor for Mrs. Kingston, was not as a witness; nor was Mr. McLachlan, the solicitor for King If " Marino" had belonged beneficially to Hester alone. the would be obvious; and the transaction is none the less a fi because the interests are complicated.

That Kingston and his wife both realized the nature of the ag

performance, and which she adopted. It is said that there can b no fraud on the part of a person who is not conscious of the fraud. But here such consciousness is proved to the hilt. As Kingston said in his defence to the action for specific perfor e a defence adopted by Mrs. Kingston - * the alleged agreement sell" ('" Marino") " provided for a release of the plaintifis" (1 trustees) "from such personal liability " (for waste and for mi: of the funds) "in consideration of trust property in the estat The Charles Kingstons, therefore, saw fully the fraudulent cha of the bargain which they got the trustees to make with them. It must be noticed that Mrs. Kingston's adoption of her husband' defence was not out of any regard for justice to the infan

_ Mrs. Kingston had learnt that the trustees personally had received

. than she had received from the estate; and she said in her

evidence that the proposed compromise (the agreement of 10th

fi April 1899) was not fair to her, as it would mean that she would only receive £1,100 as her share as against £2,000 received by each of the _ two other beneficiaries. It was on this ground that she refused to comply with the terms of the compromise. She submitted that she should not be forced to abide by an agreement when she was satis- fied that the accounts placed before her were incorrect.

Perhaps I ought to say something as to the suggestion that the Kingstons' complaints against the trustees for waste and misappropriation of moneys were mere " bluff." There is not any evidence in support of the suggestion; but probably there could be no better evidence to the contrary than the trustees' own opinion of the complaints at the time. In the statement of their case for the opinion of their own counsel (June 1899), it is stated that Miss Kingston (Ludovina) and Miss Hester "' have drawn upon the funds of the estate for their living expenses considerably more than has _ been paid in respect of the other shares, and are, of course, liable to account." Further - '' the trustees desire to enforce this agreement

and thereby avoid accounting and all questions which may be raised as to waste. . . . As although Mr. Kingston alone is responsible for . . . any waste that has occurred, that will be no answer to a suit by Mrs. Lucy Kingston and her husband." The details of the waste are set out graphically by Kingston in letters from him to the solicitors for the trustees, dated 7th January 1898 and 16th September 1898.

Whether the specific performance of the agreement ought to have

been ordered or not is now irrelevant: there was no appeal, and all the parties to the judgment are bound by it conclusively. But the plaintiffs are not bound - they were not parties; and they are entitled to seek due exécution of the trusts of the will.

It is urged that it is hard on Mrs. Kingston or her estate to be called on to give back property which she took under a judgment that she resisted (not in the infants' interest, but in her own). But

the judgment was the consequence of the agreement which Mrs. _ Kingston signed: and she had herself to blame for proposing and

H.C. oF A. signing ai an agreement, which was in fact a » fraud on the infants,

• ought to reap the benefit. In addition, there is sec, 249. This section, from its very terms

is an overriding section. It shows that whatever inferences might

Court continues " over equities generally," and that it is subsequel transferees, &c,, only - transferees from Mrs, Kingston - that protected, not Mrs. Kingston herself. I am not sure that sec, 249 is not a sufficient answer to the Public Trustee in itself; but the point is unnecessary to decide.

I ought to refer briefly to certain other grounds which have been suggested for upholding the agreement. (1) It is contended that the agreement may be treated as an appropriation of a specific asset

• • Marino " - to the satisfaction of the money payable in respect of the share of Strickland. The principle as stated by Buckley J. in In re Beverly; Watson v. Watson (1) is that where the trustee is directed (as he is directed by Sir George Kingston's will) to sell or convert a to pay the beneficiary money, "it must be competent for him to agre with the beneficiary that he will sell the beneficiary the prope against the money which otherwise he would have to pay to him; bu it is not necessary to go through the form of first converting the pro perty and then giving the beneficiary the money which the bene- ficiary may be desirous immediately to reinvest in the prope which has just been sold." But, apart from other objections, t] is not the slightest indication of any such agreement of the truste with Mrs. Kingston to sell " Marino" to her. If there is a sale ther must be a price in money: what was the price in money ¢ hat was the amount of money payable by the trustees in respect of th share of Strickland ? What amount of that money was to be satis fied by the transfer of " Marino" ? What sums were to be set off ? There is nothing in the agreement that binds Mrs. Kingston to trea ! any sum as being the value of " Marino," and as being satisfied by the transfer of " Marino." I may add that Mrs. Kingston was n

the sole person interested in Strickland's share - she was merely rtgagee of the share, without even power of attorney to receive

the share; and the beneficiaries interested subject to the mortgage did not agree to the appropriation. (2) Then it is said that if it was not an appropriation it was a compromise or family arrangement. But a compromise or family arrangement could not be binding on any who are not parties thereto - for instance, the children of Hester. (3) Sec. 21 of the Trustee Act 1893 has been referred to as sup- porting the defendant's argument. But that section related to : compromises as between the trust estate and debtors, &e., to the

• trust estate, or other such outsiders ; it does not relate to compro- inises by which trustees personally get freed wholly or partially from liabilities to the trust estate for waste or misapplication of moneys
• more particularly by getting rid of their personal liability at the

For these reasons, my opinion is that the Public Trustee - Mrs. ingston's administrator with her will annexed - should be ordered retransfer "' Marino" as well as Sec. 4894 Noarlunga to the tate of Sir George Kingston ; and that the appeal should be allowed.

Srarke J. Sir George Kingston died in 1880, leaving a will whereby he devised his freehold and leasehold estates, and bequeathed sis personal estate to trustees to sell and convert, invest, and hold the aggregate fund upon certain trusts, and ultimately, at the period of distribution, specified in the will, to stand possessed of the aggre- gate fund and accumulations therefrom in trust for his child or children then living. Sir George left him surviving five children, all of whom were of age when he died, and were also alive at the period of distribution. The children were: (1) Ludovina Cameron, (2) Hester Holland, (3) Charlotte Julian, (4) Strickland Gough and (5) Charles Cameron. The daughters Ludovina and Hester were executors and trustees of this will, and so acted until 1893, when Hester died. Charlotte was appointed a trustee of the will 1897, in the place of Hester. Ludovina died in 1908 and Char- lit in 1913. The defendant Kathleen Pittar Kingston is the sole surviving executrix of the will of Charlotte, and becomes in

that capacity the legal personal representative of the estate of Sir

in 1901, and the latter in 1902. In 1921 these two daughters obtained

George Kingston. The son Strickland Gough died intestate i 1897, leaving him surviving his widow Kathleen Pittar Kingstor and two daughters, the plaintiffs, Kathleen Molly Stuart and Doroth Kingston, of whom the former attained the age of twenty-one ye

a grant of letters of administration to their father's estate. Strick Gough had, however, in 1883, assigned to the Bank of South Aus tralia by way of mortgage his one-fifth interest in his father's estat And this interest, by various subsequent assignments, became ves in 1900 in the defendant Lucy Kingston, the wife of Sir George's son Charles Cameron. The son Strickland Gough was heavily i debt, and died, in truth, insolvent ; and it was stated at the Bar the learned counsel appearing for the plaintiffs in this action the equity of redemption in his share, which devolved upon them as his administrators, was valueless. The daughter Hester, however left a will and codicil whereby she devised and bequeathed the wl of her real and personal estate (which included the one-fifth s in her father's estate) upon trust for sale and conversion, and upo trust to pay the income to Ludovina for life and upon her death | Charlotte for life, and upon the death of Charlotte to hold the pro

Strickland Gough, on attaining the age of twenty-one years. The lif interests having fallen in, the plaintiffs are beneficiaries under this tru The plaintiff Kathleen Molly Stuart also obtained, in 1919, a grant

of Hester. Charles Cameron died in 1908, leaving his widow him surviving; but she died in 1919. The defendant the Publi

South Australia. This action, however, is concerned with tran tions relating to three only of those pieces, namely that kno as Grote Street and that known as " Marino," and an allotn described as Sec. 4894 in the Hundred of Noarlunga. Street had been the principal home of Sir George Kingston, ~ Marino" was his seaside residence near Adelaide. In 1882 tl trustees of Sir George sold the Grote Street property to Ch le

perhaps was already in, possession of the property, but had neither the means nor the inclination to pay for it. Default was 'made, and the trustees hoped, I suppose, to have more control of _ the property if Charles Cameron became their tenant, so in 1888 an agreement for a lease was entered into. Charles Cameron, however, did but little. In 1889 he signed an indenture agreeing to give up possession of Grote Street, and empowering the trustees of Sir George to sell the property and credit him with the proceeds of sale against the purchase-money. By the same document he assigned his one-fifth share in his father's estate to secure the balance

of purchase-money and interest thereon, then computed at £1 H At the end of 1898 a considerable sum for rent was owing. and the purchase-money on Grote Street was still outstanding. Notice to quit was therefore given. Charles Cameron clung, nevertheless, to Grote Street, and he was not out of possession on 10th April 1899, on which date another agreement was made that is the central eature of this action. By this agreement Charles Cameron and his wife were to give up possession of Grote Street to the trustees, and he was released from all claims. On the other hand, the trustees were to transfer to the wife of Charles Cameron the property known as "Marino." and also Sec. 4894, on payment of £270, and the King- stons were on their part to release the trustees from all claims. Still Charles Cameron and his wife remained in possession of Grote Street, and the trustees were compelled to consider the propriety of legal action. They consulted their advisers in 1899, with a view to enfor- cing the agreement of April of that year, and thus avoiding the necessity of taking accounts in Sir George's estate, and defending their administration of that estate. In truth, the trustees and their advisers, as I follow the facts of the case, feared attacks from Charles Cameron and his wife, not so much because of their personal liability but rather because of the delay that would be occasioned in obtaining and enforcing their rights in respect of Grote Street. Charles Cameron, in a letter dated 16th September 1898, detailed the character of certain waste he alleged against the trustees, but there is no direct evidence in the case to support these statements, and I should not be surprised if they were exaggerated.

Cameron, and he was to pay £11,000 for it. Apparently he took, H.C. or 4.

In July of 1899 the trustees commenced their action agair Charles Cameron and his wife, seeking specific performance of agreement of April 1899, and possession of the Grote Street prope also other ancillary relief. The trustees were not mistaken as to. the attitude of Charles Cameron. He immediately pleaded that th agreement of April 1899 was a breach of trust, which ought not to

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

withdrawing his defence, submitted to the judgment of the Court: which simply meant that he did not further argue the case. His 'wife, however, appeared in person and opposed a decree, mainly ~ on the ground that the agreement of April 1899 was not fair to her. But ultimately a decree for specific performance of the agreement was made. An order was also made that Charles Cameron and his _ wife give up possession of Grote Street and release the trustees, and that Lucy, the wife, pay £270 to the trustees upon a transfer of "Marino" and of Sec. 489a in the Hundred of Noarlunga. Some time still went by, but ultimately the trustees got possession of Grote Street, and " Marino " was transferred to Lucy on 27th April 1900 and Sec. 4894 was conveyed on 3rd May 1900. The plaintifis, twenty years having gone by, reopen, by the present litigation, this unfortunate family dispute. "Marino" and the Section in Noarlunga have greatly increased in value. Indeed, their counsel in the Court below suggested that the value was now some

• £40,000, as compared with about £5,200 at Sir George's death, and a valuation of about £1,900 at the time of the April agreement. A great advantage will thus enure to the plaintiffs if they can destroy that agreement, and the transfer and conveyance of " Marino"

and the allotment, made pursuant to it. Consequently they assert that the whole arrangement was in breach of the trusts of the will of Sir George Kingston, and that " Marino" Noarlunga were in the hands of Lucy, the wife of Charles Cameron

Kingston, inconsistently with those trusts. If this proposition be true, I apprehend that Lucy was, and her representative is, in the _ position of a trustee for the persons entitled under the trust, unless some countervailing circumstances can be established.

A contention made at the Bar was that the will of Sir George authorized the agreement of April. But that will devises the free- hold and leasehold estates of the testator to the trustees " upon trust . . . to sell my said estates or any part thereof together or in parcels by public auction or private contract." A sale pre- dicates purchase-money, and in the present transaction this principal element of a sale is wholly wanting. Indeed, the document of April states on its face the real character of the transaction, namely, an agreement "in order to settle family disputes." Nor can the

and trustees have power to appropriate assets towards satisfa

of a share in an estate (In re Lepine ; Dowsett v. Culver (1); hh .. Beverly; Watson v. Watson (2): Wigley v. Crozier (3) ).

the purchase-money against the legacy." Nothing of the sort place or was intended in the present case.

Some attempt was also made to show that Charles Cameron his wife entered into the transaction and acquired the property fo valuable consideration without notice that the acquisition was ¢ breach of trust. So far as this argument is concerned, the facts make it clear enough that both Charles Cameron and his had knowledge of the contents of the will of Sir George and of interests of the plaintiffs thereunder. It is sufficient in this connee- tion to refer to exhibits G, H and R,* and to the proceedings before Boucaut J. and the Master in respect of the action to enforce specific performance of the April agreement. Therefore I pass by this st gestion, and come now to three further contentions which vy relied upon in answer to the plaintiffs' claim.

The first was that the agreement of April could be supported a family arrangement, notwithstanding the provisions of the y of Sir George Kingston. Perhaps it could, so far as the parties to it are concerned ; but how does it bind the plaintiffs, who were in at the time of its execution, and who were not parties to it and ha ve given no assent to its terms? The argument is, in my opinic untenable, and must be rejected.

The second was that a transfer taken pursuant to the decree mad by the Supreme Court of South Australia on 8th October 1899 for specific performance of the agreement of April 1899 could not b challenged by the plaintiffs. Charles Cameron and Lucy were com pelled, under this decree, to give up Grote Street, and Lucy

(1) (1892) 1 Ch, at p. 219, (2) (1901) 1 Ch., 681. (3) (1909) 9 C.LR., at p. 438.

• Indenture of mortgage dated 8th Nathaniel Alexander Knox; and ii September 1883 - Strickland Gongh - denture of mortgage dated 17th Ji Kingston to John Currie, manager of ary 1889 - Charles Cameron King the Bank of South Australia; inden- to trustees of the estate of Sir Ge ture of assignment dated 23rd March - Kingston. - Ed. O.L.R.

ordered to pay £270 in cash on transfer of possession of " Marino" H. C. oF A. \d the Section in Noarlunga. No doubt the parties to the contract idovud the proper parties to the action for specific performance, and sruarr

the agreement had been authorized by the will of Sir George

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.

(1) (1921) 30 C.LLR., 34. (2) (1922) 2 Ch., 540, at pp. 550-552,

The third contention was that Lucy the wife of Charles Camen

"Marino" under the provisions of the Real Property Act 1 South Australia, and thereby acquired an absolute and indef title to the same. This argument has no application to See, Noarlunga, for that piece of land is subject to the general law relati to property, and not to the provisions of the Real Property A ' But " Marino," which is of much the greater value, is under the

covering the land was issued to Ludovina and Charlotte, the trus of Sir George Kingston, on 6th June 1899. And by an instrumet dated 27th April 1900, the trustees transferred the land to Luey the wife of Charles Cameron Kingston, pursuant to the decree, she was registered as the proprietor of the land on 8th May 190 and so remained until the time of her death. The title is now the name of the Public Trustee as her personal representati Now, sec. 69 of the Real Property Act enacts that the title of ev registered proprietor of land shall, subject to interests notified on certificate, be absolute and indefeasible, with certain qualificatior

that the fraud which can invalidate a registered title under

Acts is actual fraud on the part of the person whose title is impeac And actual fraud is " fraud in the ordinary popular acceptation | the term," i.e., " dishonesty of some sort," " fraud carrying with grave moral blame, and not what has sometimes been called lege fraud, or constructive fraud, or fraud in the eye of a Court of lawot a Court of equity " (Assets Co. v. Mere Roihi (1); Butler v. Fa clough (2); Battison v. Hobson (3) ). Tt seems to me both wro

(1) (1905) A.C., at p. 210. (2) (1917) 23 C.L.R., at pp. 90, 97. (3) (1896) 2 Ch., 403, at p. 412. 4

ingston and his wife in connection with the transfer to the wife of e property known as "* Marino."

med correctly, as apparently they did, then the material before established the transaction as a breach of those trusts. But is in the peculiar circumstances of this case, actual fraud? The ntiffs' right was to a one-fifth share in the aggregate fund arising the conversion of the assets of Sir George's estate. I put on e side the share of their father (Strickland Gough), for that was mortgaged for its full value to Lucy, the wife of Charles Cameron. On the other hand, Lucy was entitled to a one-fifth share in the egate fund in respect of Strickland Gough's share assigned to by way of mortgage. Charles Cameron also had a one-fifth e in his father's estate, but he in substance released it for the ther beneficiaries in the estate, partly by the agreement of April 99, and partly by the mortgage which he executed to the trustees 0 secure any loss sustained by reason of the fact that he had not

isting over the same, was made available for payment of the wghters' shares. And Ludovina and Hester during their lives ad apparently received, on account of their shares, the sums of 1,328 and £822 respectively. Charlotte's share was settled, and ie evidence does not, I think, enable us to say whether any sum s been paid on account of her share or not. The transaction of 8th April 1899 did not so deplete the assets of Sir George Kingston hat the plaintiffs were necessarily shut out from any share in his ite. Indeed, the Master's report suggests that the transaction efited the infants and that Grote Street was sufficient to pro- e for their shares, and the evidence adduced seems to sustain that onclusion. But add to these facts that the Supreme Court of South stralia forced the transaction upon Charles Cameron and his wife compelled its execution, then any lingering doubt on the ques-

on whether fraud existed is, in my opinion, obliterated. I do not Vou. XXxxIt 5

d unjust to attribute fraud, in this sense, to Charles Cameron H. ©. oF 4.

the outset, it must be conceded that both Charles Cameron ayxesron.

"his wife. But we must look the facts in the face. Charles Cam

forget that the transaction was initiated by Charles Cameron an

was compelled, and rightly compelled, to quit Grote Street, but hi and his wife had an interest in the estate, and they needed a hom What, then, was more natural than a transaction which should a once give them their share in Sir George's estate and secure tl home, while at the same time freeing Grote street and other for the other beneficiaries ? And this, as the evidence shows, the real nature of the agreement of April 1899, contrary as it the rules of a Court of equity, and irregular as were the proceeding taken to enforce it in the Supreme Court of South Australia. was no intention on the part of Charles Cameron and his wife exclude the plaintiffs from their share in Sir George Kings estate, or to injure or destroy that interest, and no knowledge th the transaction would so exclude or injure them. It was a tion far removed, in my opinion, from actual fraud. Con dishonesty and fraud were wholly absent.

But we must now consider the effect of sec. 71 of the Real P Act, which provides that nothing in sec. 69 shall be construed so to affect the rights of a cestui que trust where the registered pi prietor is a trustee, whether the trust shall be express, implied constructive. Lucy took " Marino," it is said, with knowle the trusts of the will of Sir George Kingston, and of the intere the plaintiffs in those trusts, and with the knowledge or the m of knowledge that the transaction under which she acquired property was a breach of those trusts. She was, therefore, a express or constructive (Soar v. Ashwell (1)). The argument but an application of the doctrines of the Court of Chancery as 1 notice, and ignores other provisions of the Real Property Act whit considerably modify them. Thus see. 186 provides that "no

taking . . . a transfer . . . from the regi proprietor of any estate . . . in land shall by notice direct or constructive of any trust equity to the contrary notwithstanding." But sec. 187 enacts th this provision "shall not protect any person who has ac

a transfer . . . with actual knowledge of any trust

shall not of itself be imputed as fraud." Again, in sec. 71 we find a proviso that "no unregistered . . . interest,

right, . . . or trust shall prevail against the title of registered proprietor taking bona fide for valuable consideration " ; and in sec. 72 it is declared that knowledge of the existence of ny unregistered estate or trust shall not of itself be evidence of vant of bona fides. The equitable doctrine of notice, actual and mstructive, is founded upon the view that the taking an estate ter notice of a prior right is a species of fraud (Le Neve v. Neve (1) ). Under the Act, taking property with actual or structive notice of some trust is not of itself sufficient reason for imputing fraud. The imputation. of fraud, therefore, based upon the application of the doctrines of the Court of Chancery as to notice, nnot any longer be sustained in the case of titles registered under he Act. " The difficulty lies," as Mr. Hogg points out (Registration | Title to Land throughout the Empire, p. 142), " in the demarcation [the line between knowledge or notice that is not to be treated as taud, and notice that under particular circumstances must be freated as fraud.'" Cases must necessarily arise in which opinions will differ as to whether the conduct proved is or is not fraudulent. lo definition of fraud can be attempted, so various are its forms md methods. But we may say this: that fraud will no longer Qe imputed to a proprietor registered under the Act unless some onsciously dishonest act can be brought home to him. The imputa- on of fraud based upon the refinements of the doctrine of notice s gone. But the title of a person who acquires it by dishonesty,

arty to fraud" (sec. 187), in the plain ordinary and popular eaning of those words, is not protected by reason of registration under the Act. And to titles so acquired the equitable obligations imposed by the law of trusts are as applicable as formerly.

_ There remains for consideration the important case of Loke Yew Port Swettenham Rubber Co. (2). That was a case of " deliberate fraud " (3), butthe Judicial Committee stated that there was another

(1) 2 Wh. & Tud. L.C. (7th ed.), (2) (1913) A.C., 491. (3) (1913) A.C., at p. 503.

audulently or been a party to fraud, but the . . . taking H.C. or A.

or constructively, a fiduciary character (1). An illustration given in the Act which read as follows: " A buys certain land wi notice that B has already contracted to buy it. A is a trustee with the meaning of this enactment for B, of the land so bought." Uj which their Lordships observed (2) : - ' The present is an stronger case, inasmuch as the plaintiff company through GI

their trustee and agent in the transaction, were aware that Mohamed Eusope had actually granted away these lands and b paid for them. The plaintiff company, therefore, are trustees the defendant for all the rights of which they thus had notice

of some prior unregistered right in another, then he was for purposes of the Real Property Act, sec. 71, a trustee for that othe person. But, in my opinion, that was not the point of view whie their Lordships were considering. An order had been made by th Court of first instance that the company, on the footing of being trustees for Loke Yew, should execute and register in his favour a grant of certain land (3). The argument was that the register title was indefeasible, and that no such order could be suppo To this their Lordships gave three answers, each of which rendered the argument untenable: (1) There was fraud (4); (2) there was power and duty in the Court to direct rectification - * A wrong: doer cannot shelter himself under the registration as against the mat who has suffered the wrong" (4); (3) there was evidence which established a fiduciary position between the parties (2).

fiduciary position was clear enough, for their Lordships held Loke Yew had been deprived of his property by the deliberate fraud of the agent of the company. But their Lordships were not, 1 apprehend, attempting to define the knowledge or notice of prior rights that would impose upon a registered proprietor the oblij tions of a trustee, or mark it off from that which would not impost

(1) (1913) 82 LJ. P.C., 89. (3) (1913) A.C., at p. 495. (2) (1913) A.C, at p. 505. (4) (1913) A.C., at p. 504.

to notice in the Registration of Titles Regulations of the Federated

falay Straits corresponding with those in the South Australian Act

"(see Law Quarterly Review, vol. 31, p. 399), but it is quite unneces-

sary to consider whether that fact has any bearing upon the ques- tion here involved.

Tn an earlier portion of this opinion I assigned reasons for con- cluding that Charles Cameron Kingston and his wife were not guilty of fraud or dishonesty in acquiring a registered title to "* Marino." It follows, in my view of the case, that Lucy, the wife, never became a trustee of that property for the plaintiffs or for the trustees of Sir George Kingston's estate. The action substantially fails.

But a decree must be made as to Sec. 4894 Noarlunga, which _is not protected by the provisions of the Real Property Act; and, to that extent, the appeal succeeds and the order below must be varied.

Appeal allowed. Judgment of the Supreme Court discharged. Declare that the agreement dated 10th April 1899 in the pleadings mentioned was a breach of trust and not binding on the plaintiffs. Declare that the Public Trustee holds the land described as Sec. 4894 Hundred of Noarlunga on the trusts of the will of Sir George Kingston deceased. Declare that the Public Trustee holds the land described as " Marino" free from the trusts of the said will by virtue of the provisions of the Real Property Act 1886. Order the Public Trustee as administrator of the estate of Lucy May Kingston to convey Sec. 4894 to defendant Kathleen Pittar King- ston as sole surviving executrix of the last surviving

trustee of the will of Sir George Kingston. Declare that the trusts of the will of the late Sir George Kingston ought to be performed and carried into execution under the direction of the Supreme Court of South Australia and order accordingly. Remit the cause to the Supreme Court of South Australia to do what is right in accord- ance with this order, reserving to all parties liberty to apply to that Court for such orders, accounts and inquiries,

nm him any such obligation. Apparently there are no provisions H. C. or A. ww

H.C. or A. and for such relief against any trustee of the estate o| 1923. aa

eae deceased trustee of the will of Sir George King Srvarr they may be advised. No order as to costs of the ieee: in the Supreme Court or of this appeal except that

tiffs are to have their costs out of the estate of Sir G Kingston deceased.

Solicitor for the appellants, H. G. Alderman. far Solicitors for the respondents, Badger & Hicks; Isbister, isn ward, Magarey & Finlayson ; Cleland, Holland & Teesdale Si

H ©. or A. Estate Duty - Exemption - Gifts for " religious, scientific, charitable or public 1923. tional purposes" - What are " charitable purposes ° - Whether annuity g ew) will is taxable as part of estate - Assessment - Value of annuity - Re

Mexpourn prescribing rate of interest- - Ultra vires - Hstate Duty Assessment Act 191:

Feb. 2 3 (No. 22 of 1914 - ) of 1916), secs. 8, 50 - Hslate Duty Regulatic 26 ; June 6. (Statutory Rules 1917, No. 267), reg. 33. apse ay See. 8 of the Hstate Duty Assessment Act 1914-1916 provides that " (1 Rich and

Starke JJ. to this Act, estate duty shall be levied and paid upon the value, as : under this Act, of the estates of persons dying after the commencement of