RECALLED PROBATE

Evening Post, Volume CXXVIII, Issue 12, 14 July 1939, Page 11

RECALLED PROBATE

PAYMENT OF £8450

COMPANY HELD LIABLE

The Court of Appeal, by a majority of three to one, has reversed the judgment of Mr. Justice Northcroft which was in favour of the Guardian Trust and Executors Company of New Zealand, Ltd., when the Public Trustee sought to recover the sum of £8450 which the company had paid out to beneficiaries under the will of the late Miss Elizabeth Smith, of Christchurch. Probate of the v/ill under which the money was paid was subsequently recalled on the grounds of testamentary incapacity. In the Lower Court Mr. Justice Northcroft had held that the company had acted in good faith and was not liable for the money which it had paid out as executors of the first will. It was against this judgment that the Public Trustee had appealed.

In the course of a lengthy judgment, the Chief Justice (Sir Michael Myers) said that the will, probate of which was subsequently recalled, was secured by the respondent company, whose only interest in procuring it was the profit it would derive from the administration of the estate if it were appointed executor. In his opinion the subsequently recalled probate had been, irregularly and improperly obtained in the first instance through the respondent company failing in its duty by not placing the facts of the case before the Court. "In all the circumstances of the case," concludes 'the Chief Justice in his judgment, "I can come to no other conclusions than that the probate was irregularly and improperly obtained; that the payments to the legatees were made with knowledge and notice on the part of the respondent of facts and circumstances which should have made it plain to any ordinary, reasonable, and prudent man of business that the payments should not have been made; that these payments would not have been made| but for the order under section 74 of the Trustee Act 1908; that that order was also irregularly and improperly obtained; and that, in air the facts and circumstances of the case, the payments cannot be regarded as having been made in good faith. In my opinion the judgment of the Court below is erroneous and the appeal should be allowed."

At the conclusion of a concurring judgment, Mr. Justice Smith said that there was no doubt that if the true position had been explained to the Court which originally granted the probate subsequently recalled, either the respondent would have been directed to prove the will in solemn form or a much longer period would have been granted for the barring of claims. "In the former event, the money would not have been paid to the wrong persons. In the latter event, it is a reasonable inference that these Christchurch plaintiffs or some other plaintiffs would have brought their action in time to prevent the money from being paid away. I do not think the respondent can object to such an inference. I am therefore of the opinion that the respondent did not pay the ■ money bona fide and that it is personally liable to repay the same."

Mr. Justice Fair also held that the appeal should be allowed and judgment entered for the Public Trustee.

In a dissenting judgment, Mr. Justice Ostler said that in his opinion the respondent company had acted throughout honestly and in* good faith, and that the judgment given in the Court below in their favour was right.

At the hearing of the appeal Mr. H. F. O'Leary, K.C., and Mr. T. P. Cleary appeared for the Public Trustee, the appellant, and Mr. H. P. Richmond and Mr. H. E. Barrowclough, both of Auckland, for the respondent company.