Brunker
v Perpetual Trustee Co Ltd

Judges: Latham CJ
Rich J
Dixon J

McTiernan J

Subject References:
Real property
Gift
Memorandum of transfer
Death of donor
Authority of third person
Notification of encumbrance
Unauthorized insertion
Materiality
Imperfect gift
Capacity
Undue influence

Legislative References:
Real Property Act 1900 (NSW) No 25 - s 46

Sydney

Judgment by:
McTiernan J

In my opinion the appeal should be dismissed.

The decree of the Supreme Court of New South Wales against which this appeal is brought declared that a memorandum of transfer of land under the Real Property Act 1900 (N.S.W.), lodged by the appellant for registration, was of no effect, and granted certain consequential relief including an injunction restraining the appellant from further attempting to register it. The suit was instituted by the respondent which is the executor of the registered proprietor of the land described in the memorandum of transfer. He died on the day after he had executed the transfer in favour of the appellant. It was made for a nominal consideration only. A material question in the suit was whether the deceased had made an effectual gift of the land. If the gift had not been perfected by the deceased he could have repented of his bounty, and nothing appears that would make it unconscientious in the view of a court of equity for the respondent as his executor to oppose his bounty being perfected by the registration of the transfer. The Supreme Court (Nicholas J.) decided that question against the appellant. In my opinion that decision was right and it is sufficient to dispose of the case.

The memorandum of transfer bore a notification that it was made subject to a lease, but there was no notification of an existing mortgage to the Commonwealth Bank of Australia. It was expressed to transfer to the appellant an estate in fee simple in remainder expectant on the death of the transferor. The instrument was prepared by a law stationer, Fuller, a friend of both the deceased and the appellant, and was witnessed by the manager of the local branch of the Commonwealth Bank of Australia. It was not handed by the deceased to the appellant, but remained in the possession of Fuller who, after the death of its maker, handed it to the appellant's solicitors. As the mortgage to the bank was undischarged a notification of that encumbrance was added to the transfer and it was lodged for registration, on behalf of the appellant.

The legal estate in the land could not pass to the appellant except by registration of the transfer, and, as she was a volunteer only, no equitable rights passed to her by the transfer, which did not purport to be a declaration of trust. It is plain that if the registered proprietor of land, intending to make a gift, executes a memorandum of transfer in favour of a volunteer and retains possession of the instrument, the volunteer has no equity to compel the registered proprietor to have it registered or to obtain possession of the instrument in order to have it lodged for registration. If he gives a duly executed transfer to the donee or to someone on his behalf, then the question arises which was much debated, whether the gift is effectively made, or whether it is necessary that the donor should also give the donee the duplicate certificate of title, or enable him to obtain it, or, indeed, whether registration itself is necessary. But none of these questions arises unless the donor has taken the necessary preliminary step of giving the executed transfer to the donee or to someone on his behalf. In the present case the deceased did not give the transfer to the appellant. But the appellant contends that this preliminary step was accomplished when the transfer was given to Fuller. If he were merely the agent of the donor it is clear that his authority as agent, whether it was to hand the instrument to the appellant or to have it registered, came to an end at the death of the donor. As against this it was urged that Fuller's position was that of a mandatory and that his authority as such to have the transfer registered did not terminate with his principal's death. Although the deceased had communicated to the appellant his intention to make her the gift no equity or right arose in her to prevent the deceased from repenting of his intended bounty. The deceased took no irrevocable step by handing the transfer to Fuller for registration. He was free to revoke his instructions before they were carried out. There is no basis in principle for the conclusion that, whether Fuller was an agent or might more properly be described as being vested with a mandate to perfect the gift by having the transfer registered, his authority was not determined at the death of the intending donor. Nor can the appellant's position be improved by treating Fuller as her agent for that conclusion is quite impossible on the evidence.

It is unnecessary in this view to decide whether the transfer was invalidated by the addition of the notification of the mortgage or to discuss the issues of incapacity or undue influence.

I should add that I see no reason for disturbing the order of Nicholas J. as to costs.