- Notable Unreported Decision
SUPREME COURT OF QUEENSLAND
28 August 2007
23 August 2007
de Jersey CJ
Order that the respondent’s application filed on 13 April 2006 and amended on 11 August 2006, and brought purportedly under s 41 of the Succession Act 1981, be dismissed, with costs to be assessed
SUCCESSION – FAMILY PROVISION AND MAINTENANCE – CIRCUMSTANCES PRECLUDING RELIEF – where testator left all property to be held by executors on trust for granddaughter – where respondent son of testator made application for provision out of the estate under s 41 Succession Act 1981 (Qld) – where application was made out of time – where respondent had earlier instructed solicitor to make application for provision out of estate, and solicitor had failed to do so – where estate fully administered – whether respondent’s application for provision should be dismissed
Succession Act 1981 (Qld), s 41
Testator’s Family Maintenance and Guardianship of Infants Act 1916 (NSW), s 4(1), s 5(2A), s 11(3)
Re Burgess  2 Qd R 379, followed
Re Donkin, deceased; Riechelmann v Donkin  Qd R 96, followed
Easterbrook v Young (1977) 136 CLR 308, distinguished
Holmes v Webb (unreported, Court of Appeal, 18 August 1992, OS 542 of 1989), followed
Re McPherson  2 Qd R 394, followed
Re Oakley  2 Qd R 269, followed
Re Parry (unreported, 11 March 1991, 23 of 1990), followed
Re Prufert (unreported, 4 April 1991, OS 123 of 1991), followed
G M Egan for the applicant/respondent
M J Eastwood for the respondents/applicants
Bolster & Co for the applicant/respondent
Geoff Williams & Associates for the respondents/applicants
 de JERSEY CJ: The applicants are the executors and trustees under the last will of Rodney Raymond Baker. Mr Baker died on 5 August 2003. The applicants were granted probate of the will on 3 November 2003.
 The respondent Brendan Rodney Baker is the son of the deceased. Under his will, the deceased left all his property to be held by his executors on trust for his granddaughter Jacquelyn (the respondent’s daughter), provided Jacquelyn survived him and reached the age of 18 years. Jacquelyn is presently 14 years old. The assets of the estate are held by the applicants on trust for Jacquelyn, and that has been the case for some years. It was common ground, on the hearing before me, that the estate had been fully administered.
 Shortly after the death of the deceased, the respondent instructed a solicitor to act on his behalf to make an application for provision out of the estate under s 41 of the Succession Act 1981. The solicitor notified the applicants of the respondent’s instructions, by letter of 17 September 2003, but apparently took no further step to prosecute the application, notwithstanding subsequent contact from the respondent. Assuming these matters, there is plainly a case for investigation whether that solicitor would not be liable for damages for negligence.
 In December 2005, the respondent instructed his present solicitors. They filed his application on 13 April 2006, two years eight months after the death. Section 41(8) of the Succession Act provides that “unless the court otherwise directs”, no such application may be heard unless instituted within nine months of the death. Although the originally filed application did not seek the necessary leave, it was on 11 August 2006 amended to seek the Court’s leave for the hearing of the application out of time. There is presently no question as to the efficacy of that amendment.
 The applicants seek the dismissal of the respondent’s s 41 application on the ground it was brought at a time when the estate had been fully administered and the assets distributed.
 If I do not on that basis dismiss the respondent’s application, discretionary issues arise bearing on the question whether leave should be granted under s 41(8). It would in that case be necessary to adjourn the hearing of the respondent’s application, so that the parties might make further submissions. (Mr Eastwood, who appeared for the applicants, was not presently in a position to deal with the respondent’s application in that respect.)
 I turn to the competence of the respondent’s application. The issue is whether it is out-of-court because, out of time, it post-dates the completion of distribution of the assets of the estate.
 In 1966 the Full Court, in Re Donkin, deceased; Riechelmann v Donkin  QdR 96, determined that where an estate has previously been fully administered, an application for extension of time for the bringing of such an application cannot succeed, because there remains no estate from which further provision may be made. Hanger and Gibbs JJ took that view.
 Gibbs J dealt with the issue comprehensively as follows (p 113, 114, 117):
“…the words ‘the estate of the testator’ [the statutory reserve from which further distributions may be ordered] … refer to all the property that belonged to the testator and has not yet passed to any other person absolutely and in his own right. Once the title of a beneficiary has become complete, so that he holds in his own right the property given to him by the will, that property ceases in any ordinary sense to be part of the estate of the testator, and becomes part of the estate of the beneficiary. The [Testator’s Family Maintenance Acts] give no power either to the Court to order that provision be made out of the estate of a beneficiary, or to the executors to recover former assets of the testator’s estate that have been distributed to the beneficiaries entitled to receive them.
Once an asset ceases to be an asset in the testator’s estate, and the beneficiary to whom it is given has received it in his own right, there is no power to subject that asset to the incidence of an order under the Acts, or to require the beneficiary to restore the asset to the estate or to make a payment in satisfaction of the order.
If a will requires the executors to hand over the residuary estate to other persons to hold it as trustees, once the estate has been so handed over it ceases to be the estate of the testator and is beyond the power of the Court to affect by an order under The Testator’s Family Maintenance Acts. If however the executors are themselves the trustees, once the estate has assumed the character of a trust estate it equally ceases to be part of the testator’s estate; in equity it belongs to the beneficiaries and the court is not empowered to divest what has been vested in them.” (emphasis added)
 That view was later followed in a number of single judge decisions: Re Burgess  2 Qd R 379; Re Oakley  2 Qd R 269; Re McPherson  2 Qd R 394; Re Prufert (unreported, 4 April 1991, OS 123/1991); and Re Parry (unreported, 11 March 1991, 23/1990).
 Mr Egan, appearing for the respondent, submitted that the decision of the Full Court in Donkin was effectively overruled by the subsequent decision of the High Court in Easterbrook v Young (1977) 136 CLR 308.
 In Re McPherson, Connolly J explained why, in his view, that was not so. That drew the subsequent approbation of others. Master White (as Her Honour then was) followed that aspect of McPherson in Prufert, as did Kneipp J in Parry. In Re Burgess, Carter J said that Easterbrook v Young “was decided by reference to significantly different legislative provisions and Andrews J in Re Postle (OS 796/1981, unreported) has already held in this Court that Easterbrook v Young must be read in the light of the provisions of the New South Wales legislation which is significantly different. With that I respectfully agree.”
 The question again arose at appellate level (post Donkin) in Holmes v Webb (unreported, Court of Appeal, 18 August 1992, OS 542/1989), where these observations were made:
“The appellant seemed to accept, and it cannot be doubted, that final distribution to beneficiaries precludes the making of an order out of a deceased estate under Part IV of the Succession Act: see Re McPherson  2 Qd R 394. The position in other jurisdictions, such as New South Wales, and the decision of Easterbrook v Young (1997) 136 CLR 308, are to be distinguished on the basis of differences in the relevant legislation.”
 Against that formidable array of State authority, Mr Egan submitted – with courage characteristic of the Bar – that the Queensland authority impermissibly distinguished Easterbrook v Young, and that if correctly applied, Easterbrook gives rise in this case to a discretion in the Court to entertain the respondent’s application, notwithstanding the application is out of time and the estate has been fully administered. I must again look to the present relevance of Easterbrook.
 In Easterbrook, the High Court was dealing with the New South Wales Testator’s Family Maintenance and Guardianship of Infants Act 1916. The Court’s approach was strongly influenced by provisions of that Act which have no counterpart in the Queensland legislation.
 The first provision to which their Honours referred is s 4(1), which provided:
“Every provision made under this Act shall, subject to this Act, operate and take effect as if the same had been made by a codicil to the will of the deceased person executed immediately before his or her death.”
 Their Honours observed (p 315-6):
“The court’s order has effect as a codicil in the case of a testate estate and as a variation of the statutory trusts in the case of an intestacy. The court, by the effect of its order, can alter the operation of the very dispositions of the will which might otherwise determine the capacity or power of the personal representative as well as the beneficial interests which would otherwise arise. As a codicil, the court’s order operates as on the death of the deceased: see s 4(1) and
(2). The evident purpose of the Act is to place the assets of the deceased passing to the personal representative at the disposal of the court in the provision of maintenance for the nominated dependants of the deceased. Because the court’s order has effect as a codicil, the property out of which provision may be ordered includes property which, but for the order, would have been beneficially owned either wholly or partly by donees under the will or next of kin under an intestacy. It is plain that the burden of an order is to be thrown on property to which persons are beneficially entitled under the will or on intestacy.”
 Then their Honours referred to s 11(3) of the New South Wales Act. Section 11 provided for notices to be given by executors inviting claims from creditors, and protection against liability to persons where there is no notice of any claim prior to distribution. Sub-section (3) provided:
“Nothing in this section shall prevent the court from ordering that any provision under this Act shall be made out of any assets so distributed.”
 Of this provision, their Honours said (p 316):
“…An actual distribution of the deceased’s property to persons beneficially entitled thereto shall not preclude the making of an order, even out of the distributed assets. Section 11(3) is explicable only on that footing. The Act in so providing assumes that the sub-section at least covers the case where executorial or administrative duties have already been fully performed before such distribution has taken place. Thus, by the very terms of the Act, if an application is made in due time, the court may make provision out of any asset which came to the hands of the personal representative from the deceased through his death and the grant of probate or letters of administration.”
 The importance of those provisions to their Honours’ conclusion in Easterbrook may be gleaned from a following passage (p 316):
“As we have emphasized, to give to the court’s order the effect of a codicil operating as on the death of the deceased, underlines the fact that the provision of the beneficial interest under the will is no bar to the court’s power to make provision for maintenance if needs be out of what is theirs or, but for the order, would be the beneficial property of a beneficiary under the will. Section 11(3) underlines the policy, which has the result that an actual distribution does not place the asset beyond the reach of the court’s power to order maintenance.”
 In McPherson, Connolly J said, and I agree, that those two points were “obviously critical for the decision of the High Court” (p 398).
 The absence of those legislative indicators, from the plain Queensland scheme, means there is no detraction from an otherwise clear position. To the extent the legislature may have intended to reduce certainty for beneficiaries and creditors, it must be taken to have done so clearly. The remaining scheme should therefore be approached literally. Where there is no estate left, there is nothing from which provision may be made; and in determining that, there is no reason to depart from established legal principle, including the principle that an equitable interest vests in the beneficiary.
 Mr Egan placed reliance on s 5(2A)(a) of the New South Wales legislation which, after dealing with the prospect of an extension of time in respect of such applications, provided:
“…But every application for extension shall be made before the final distribution of the estate, and no distribution of any part of the estate made before the application shall be disturbed by reason of the application or of an order made thereon”.
 The High Court read that reference to “distribution” as meaning actual physical payment over of monies, for example. Their Honours’ approach to that provision was tied up with the significance they attributed to s 11(3), as emerges from this passage at pp 316-7:
“The contrast of s 11(3) read with s 3 and s 5(2A) is, to us, eloquent of the policy of placing within the power of the court under s 3 all that passed to the personal representative on the grant of probate or letters of administration. Bearing in mind the nature and purposes of such legislation, it is our opinion that the disabling circumstance in s 5(2A) is the actual distribution of the estate, its removal from the hands or name of the personal representative and its placement in the hands or name of the testamentary or statutory beneficiary.”
 Hence the conclusion expressed by Connolly J in Re McPherson (p 398), with which I agree:
“It may be seen that strictly speaking neither Easterbrook nor Donkin covers the case before me. In neither was it doubted for a moment that actual final distribution to the beneficiaries precluded the making of an order. In Donkin this was for the reasons already set out from the judgment of Gibbs J. In Easterbrook it was because s 5(2A)(a) expressly so provided. It follows that an order for extension of time could not properly be made in this situation being no longer ‘an estate of the deceased person’ for the court’s order to operate on in terms of s 41(1).”
 Mr Egan referred finally to the High Court’s mention of Donkin in Easterbrook at pp 322-3:
“In Re Donkin … an appeal against the making of an order for extension of time was allowed on the ground that at the time when the application was made there was no estate of the testator. It was not seriously contested before the court (1) that an order under the Testator’s Family Maintenance Acts, 1914 to 1952 may only be made out of the estate of the testator and (2) that when executors who are also trustees have completed their executorship and hold the property remaining vested in them as trustees for the beneficiaries, the property so vested is no longer part of the estate of the testator. Accordingly, there was no examination of the basis on which these conclusions were put.”
 On the basis that implicitly laid open the correctness of Donkin, he took me to what was said in Easterbrook at page 324:
“It seems to us that in all the cases, except Keys’ Case, insufficient attention has been given to the basic question of the construction of the words of the statute in the context in which they appear, including the evident purpose and policy of the statute. What is more, the cases do not contain any examination of the consequences which flow from an adoption of the views there expressed. … It is, in our opinion, incongruous to deny jurisdiction so soon as executorial duties are complete. To import into the construction of this legislation the technical considerations applicable to the determination of a personal representative’s powers is, in our opinion, an unwarranted development because it involves a failure to give due weight to the purpose of the legislation and it results in a frustration, rather than a facilitation, of that purpose.”
 But just as the High Court attended closely to the precise terms of the legislation in Easterbrook, so this Court is constrained by the terms of the Succession Act 1981. Easterbrook is not determinative of this matter, because it concerned materially different legislation, and because it did not lay down any general principle which is determinative of the present application notwithstanding the statutory differences.
 The proper construction of the Queensland legislation must condemn the respondent’s application. So does well-established appellate and first-instance authority in this State. Most of those decisions were given in the context of the High Court decision on which the respondent now depends. The basis on which it was distinguished is compelling.
 Those considerations aside, there is in the end the common-sensical desirability of preserving the certainty and integrity of an executorial administration regularly completed a long time before the current issues may have been raised.
 But that said, it is the proper construction of the Act, as confirmed in previous unassailable decisions of this Court, which determines the fate of this application, and for reasons previously traversed, that means the respondent’s s 41 application must fail.
 On the applicant’s application, there will be an order that the respondent’s application filed on 13 April 2006 and amended on 11 August 2006, and brought purportedly under s 41 of the Succession Act 1981, be dismissed, with costs to be assessed.
- Published Case Name:
Baker v Williams & Brunner (as executors of the estate of Baker)
- Shortened Case Name:
Baker v Williams
 QSC 226
de Jersey CJ
28 Aug 2007
- White Star Case:
No Litigation History