SUPREME COURT

Dominion, Volume 12, Issue 162, 3 April 1919, Page 8

SUPREME COURT

4 NAPIER WILL CASE MACFARLANE V. VIGOR BROWN A case adjourned from Napier camo before His Honour tho Cluet Justice (Sir Robert Stout) yesterday. Ilia action was brought by Amelia Charlotte Macfnrlnne. wifo of John A. Mucfarlane, shcepfariner, of Napier, against John Vigor Brown, merchant, and Irancis Loßan, 'liolicitor, of Napier, joint executors and trustees of the will ot Hio lato Edward W. luiowles, deceased. Mr. M. Jlvers. with him Jlr. T. Ncave, appeared for'tlic plnintifl-, and Mr. C. P. Skcrrett, K.C.. with him Mr. H. 13. Lusk, appeared for the defendants. Statement of Claim.

The statomont of claim set out- that i the lato Mr. Knowlos had inserted a clauso in his will leaving a largo sum to ■charity, the trustees, to use their discretion iii allotting the amounts lo various institutions. This clause of the will was disputed, and by a decision of the Court of Appeal subsequently conhrmeil bv the Privy Council, declared void, and judgment given that tho persons benchtins by the sum mentioned in the clauso i were the persons to whom it would have accrued in tho case of the deceased dying intestate, i.e., the plaintiff and her mother the widow of tho deceased, mo plaintiff also claimed that the defendants had committed wilful default in the following respects:— (a) In the sale of the freehold proncrty to tho "Daily Telegraph" Company, Ltd., in Tennvson Street, of which the plaintiff was not aware, and which was valued at jE8855. and sold at .£7OOO without competition. \ , , (W In tho sale of the land known ae tho now Post Office site, without public competition, and at less than value. (c) In purporting to exercuo a trust for sale after the judgment of the Lourt of Appeal. ~ (el) In'not paying any nieomejo the plaintiff' of her shave and interest in tli- capital of the testator's estate and in not accounting to the plnintifl for the same, and without the consent of. and without consulting tho plaintift retaining her income in their hands or investing the same in their own names. Wherefore the plaintiff prayed :-{l) That an account may be taken of the real and personal estate-of the said testatrix. Diana Eden Knowles, and that the said estate be administered under the decree of this honourable , Court. . (Z) Such other relief ns io the Court might see just. ' i Statement flf Defence.

In their statement of dofence the dedefendants set out that all business.was done on strictly business lines, and that the sale of land to the. "Daily lelegrapb" Company .was a prudent one. The defendants denied that they were under any legal, equitable, or other -obligation to consult, the plaintiff or her solicitors os to tnd propriety or 'expediency of selling the said Tennyson Street or any other property before they actually- sold, and they' denied that at the time of the snie tho defendants had in their hands moneys or liquid investments sufficient to satisfy the death duties payable, upon the estate of the testator. ■ The new Tost Office site had been taken under the Public Works Act. In regard to clause (d) of the claim, the defendant held that no incouvenii'iico was caused the plaintiff by tho withholding ol the moneys, which was due. to a mistake. Sinc'o tho issue of the writ a I chcQiio for .£SOO had -been sent, 'llio defendants deiiio:! every allegation of impropriety in administering tho estate, and said iliac tne proceedings were instituted owing to the caprice of the niaintiif, and in order to compel defendants to resign the executor end trusteeship of tho estate of the into Diana Eden Knowlos , . In respect to the second action, after the death of the testator K.. AV. Kiiowles, Mrs. Xnowles died, and gave her interest for the benefit of Mrs. Macfarlauo.s children. This included the third of the u-siduc of the Knowles Estate, whichwould have gone to charity had thaiprovision in the will of E. W. Knowles been upheld. Mrs. Knowles appointed her daughter. Mi's. Macfadane, and Mr. Vigor .brown trustees of her will, and liie action was brought by Mrs. Mucforlniift on behalf rt herself and her children to havo the trusts of the will administered by tho Court upon the ground that she- could not agree with Brown in administering the Imst. The cases were heard in Napier on March 17 and IS, wrten evidence was taken, and were adjourned to Welling-

ton for argument. Mr. Myers, in opening, said that the present position- in each case was that they now moved for judgment. As His Honour would remember, there were two oases. He proposed to put in a general way tho submission that they mado and then to deal 1 with each submission seriatim. First of all, ho submitted that they were entitled to ft decree cs a matter of course in each action; secondly, if tho granting of such decree was at the discretion of the Court, which he contended was not tho caso in Now Zealand, then ho contended that they were entitled to a common decree in each case. In the case arising out of the estate of E. AY. Knowles, ho contended they were entitled to something moro than a common , decree, that was to say they were ontitled to a decree on footing of wilful default. It might bo on something done or on something left undone. Hβ proposed to take the first point because that Doint was unsolved in each of the two actions. The Now Zealand Supreme Court rules were made in 1882, and there had been alterations from time to time, but there was no alteration that affected the. question now under consideration. In 1883 there was made in England for tho first time a. new rulo which conferred a discretion'ion the Court in issuing decrees for administration. That now rule was now contained in Order f>s, Pule 10. His submission .was that prior to the •making of that rule there was no discretion in England, and the decree for administration went as a right, and ho contended ■tliftfc' the same position obtained and still obtained in New Zealand. Tho New Zealand rules contained no such provision as tliat contained in Order 55, Bute 10 in England. The New Zealand rule as to originating summons did not help tho matter. He read Rule No. 537 bearing on tho point, and said that the rule might bo compared with Order 55, Me 3 of tho English rules. The English orden contained) this in Rule 10, but it did not appear in the New Zealand rules. Mr. Myers then dealt exhaustively with the history of these rales in England, and the rules m New Zealand, and quoted extensively from authorities. " • ~ , Mr. Neavo also referred to the English rule. Ho contended that the English rule assumed the existence of the right, to a. decree. In order to find how a rcsidiunry legatee became entitled to the .right they miist look to tho decisions of tho Chancery Court. -■Hβ.was prepared to concede that originally and. in tho early , times the Court of Chnncery exercised its discretion as to making a decree, but in the courso. <A time, by virtue of decisions mado by tbe Court, tho recognition of the absolute right becamo established. Hia Honour: But the other sulo say that reasons for those decisions had failed, and if reason fails, the aw fails. For instance, at one time when deer were wild they could not bo stolen, but when d'eer became tame they could bo stolen

just as a cow could bo stolon, for the renson Hint they were not wild. Continuing, Mr. Nome said that the Court of Chancery developed its rules and principles in such a way that they became as rigid and inflexible as the common law. The rules of the Now Zealand Supremo Court embodied lor the most part tho decisions of the Chancery Court, and when the New Zealand rules were brought into forco the principles of a right to a decree had become established as in tho Court of Chancery. Iho effect of the originating summons procedure went to the point as to whether the Court should grant this decree as a matter of discretion. Under tho rules relating to originating summons, any beneficiary might come to the Courf to have the matter connected with the trust decided. Rule 537 made that clear. In this rase, having regard to tho fact that differences existed between tho trustees, thero was nothing in tho world to prevent tho beneficiary making repeated applications to tho Court for orders for what was, after all, a routine matter, and as a matter of discretion it was better to make tho general order now. On tho point as to the exhaustion or invalidity of tho trust for sale under tho will, it was submitted thoro was a trust for ealo and power of indefinite postponement. This infringed tho rule against perpetuities, but for tho creation of an intended chanty- '-The trust was intended by the testator to .be a charitable. trust, but that trust mis declared void, and on that declaration the trust 'for salo liecame void also. His Honour: Tho trust for sale did not relate exclusively to the charity. air. Neave said that the ultimate trust was for the charity, and if tho ultimate trust became void, then tho whole trust for salo foil with, tho trust for charity. Upon the decision of tho Appeal Court the trustees bucamo trustees of • tho residuo of the estato. Under the Administration Act the trustees must hold tho residue for the benefit of the noxt-of-kin, not under the will, but under the Act. The trustees hold the whole of tho assets comprising the residue as baro trustees -liable to convoy tho snino to the next-of-liin upon demand. A domand ivas made on tho trustees in tho proceedings token in the Appeal Court. In regard to tho real estate, the trustees had no right to sell without tut order of the Court or the consent of tho boneficlarlcs.

His Honour: Your contention is that on the judgment of tho Court of Appeal tho trustees had no power of salo except tho po.v<jrs conferred on them by tho Admit istration. Act Mr. Neave: Yes, that is my contention on the authority of the decisions quoted. At this stage the further hearing wis adjourned until this morning.