O'Neill v O'Connell
72 CLR 114(1945) 19 ALJ 227
(Judgment by: Starke J)
O'Neill
vO'Connell
Judges:
Starke JDixon J
Williams J
Legislative References:
Judiciary Act 1903-1940 - 38A; 40A
Rules Publication Act 1903-1939 - 6A(1)
Case References:
cf Ex parte Walsh and Johnson, Re Yates - 37 CLR 36; [1926] ALR 77
George Hudson Ltd v Australian Timber Workers' Union (1923) - 32 CLR 413; 30 ALR 19
re Cousins, Alexander v Cross - (1885) 30 Ch D 203
Skelton v Younghouse - [1942] AC 571
Sharp v Union Trustee Company (1944) - 69 CLR 539
London and South-Western Railway Company v Gomm - (1882) 20 Ch D 562
Given v Massey (1892) - 31 LR Ir 126
Re Wilson, Wilson v Wilson - [1908] 1 Ch 839
Larsen v Sylvester and Co - [1908] AC 295
Thorman v Dowgate Steamship Co Ltd - [1910] 1 KB 410
cf Robertson v Deputy Federal Commissioner of Land Tax - 65 CLR 338; [1942] ALR 237
re Cousins - (1885) 30 Ch D 203
Wright v Morgan - [1926] AC 788
Radnor v Shafto - (1805) 11 Ves 448; 32 ER 1160
Brooke v Garrod - (1857) 2 De G
&
J 62; 44 ER 911
cf Attorney-General v Wax Chandlers Company - (1873) LR 6 HL 1
Messenger v Andrews - (1828) 4 Russ 478; 38 ER 885
re Drew - [1919] VLR 600; 25 ALR 400
R v Maryborough Licensing court (1919) - 27 CLR 249
Pirrie v McFarlane (1925) - 36 CLR 176; 31 ALR 367
Ex parte Walsh and Johnson (1925) - 37 CLR 130
Commonwealth v Kreglinger (1926) - 37 CLR 420; [1926] ALR 180
James v South Australia (1927) - 40 CLR 333; [1927] ALR 334
R v Gates, Ex parte Maling (1928) - 41 CLR 519
R v Carter, Ex parte Kisch (1934) - 52 CLR 224; [1935] ALR 125
Ffrost v Stevenson (1937) - 58 CLR 577; [1937] ALR 533
Hopper v Egg and Egg Pulp Marketing Board (1939) - 61 CLR 673; [1939] ALR 251
Joyce v Australasian United Steam Navigation Company (1939) - 62 CLR 160; [1939] ALR 442
R v Bevan (1942) - [1942] ALR 170
Oppenheimer v Minister of Transport - [1942] 1 KB 242
Re Cant's Estate - (1859) 4 De G
&
J 503
re Kerry - (1889) WN 3
Re Armstrong's Will Trusts, Graham v Armstrong - [1943] 1 Ch 400
Commissioner of Taxes (Queensland) v Camphin - [1937] ALR 401
Trustees Executors and Agency Co Ltd v The Federal Commissioner of Taxation - 69 CLR 270; [1944] ALR 319
Re Busby, Busby v Busby - (1930) 30 SR (NSW) 399
Ex parte Hardy (1861) - 30 Beav 206
Re Davison and Torrens - (1866) 17 Ir Ch 7
Re Wilson - [1908] 1 Ch 839
Lord Advocate v Meiklam - (1860) 22 S C 1427
Judgment date: 11 April 1946
Judgment by:
Starke J
Jerome O'Connell, who died on 26th October, 1944, made a codicil to his will, whereby he gave to Daniel O'Neill an option to purchase the freehold of certain premises at £6500, for which his executors might allow terms of option to be exercised within twelve months of his death.
Daniel O'Neill purported to exercise this option by notices dated 24th August, 1945, and 16th October, 1945, the latter notice being given in case the former did not confer upon him an enforceable right to receive a transfer of the freehold.
An originating summons issued out of the Supreme Court of Victoria sought the determination ( inter alia ) of the question whether these notices conferred upon the plaintiff Daniel O'Neill an enforceable right to receive a transfer of the freehold of the testator's business premises upon the terms contained in the codicil to the will of the deceased. Gavan Duffy, J, was prepared to answer the question in the negative, because the notices operated as offers to purchase the land which the executors did not and could not accept, by reason of the provisions of the National Security (Economic Organisation) Regulations. But the validity of these Regulations being challenged, the learned Judge made no order, having regard to the provisions of the Judiciary Act 1903-1940, ss 38A and 40A.
By s 38A the jurisdiction of the High Court is exclusive of the jurisdiction of the Supreme Courts of the States in matters involving any question, howsoever arising, as to the limits inter se of the constitutional powers of the Commonwealth and those of any State or States, and s 40A provides that when in any cause pending in the Supreme Court of a State there arises any question as to the limits inter se of the constitutional powers of the Commonwealth and those of any State or States, it is the duty of the State court to proceed no further in the cause which is by virtue of the Act and without any order removed to the High Court.
The cause came before the Chief Justice of this court, who proceeded on the basis that the cause was removed into this court. He agreed with Gavan Duffy, J, that the effect of the option was that the executors of O'Connell were bound to offer the land to O'Neill, that no such offer was made, because they adopted the position that the acceptance of the offer would result in the purchase of the land by O'Neill, which was prohibited by the Economic Organisation Regulations without the consent of the Treasurer of the Commonwealth, which had been refused, and he held that the case fell within the terms of the Regulations, which were valid.
An appeal is brought from that decision to this court, which directed Counsel to confine their arguments, for the time being, to matters that did not touch the constitutional validity of the Regulations.
There are some passages in R v Maryborough Licensing court , (1919) 27 CLR 249 , which suggest that only the inter se question is removed into this court: that the jurisdiction of this court is confined to the determination of that question because of the limited nature of the original jurisdiction of this court -- see Constitution, ss 75 and 76, and Judiciary Act, s 30. It is, however, the cause that is removed by s 40A.
Once the cause is removed, this court is clothed with full authority essential for its complete adjudication; it is the cause which is removed, and not merely the question involving the interpretation of the Constitution" -- cf. Ex parte Walsh and Johnson, Re Yates , 37 CLR 36 at p 130, [1926] ALR 77. But the court must be satisfied that its jurisdiction attaches, that the decision on the constitutional question is necessary for the adjudication of the rights of the parties. And jurisdiction attaches, I gather, at the moment the Supreme Court, in the course of its proceedings, encounters, and not before it encounters, the constitutional question. The Supreme Court should not stay its hand until the constitutional question "becomes necessary for the determination of the rights of the parties" -- see In re Drew , [1919] VLR 600 , 25 ALR 400 ; R v Maryborough Licensing court (above ) ; George Hudson Ltd v Australian Timber Workers' Union , (1923) 32 CLR 413 at p 429, 30 ALR 19 .
Both Gavan Duffy, J, in the Supreme Court, and the Chief Justice of this court were of opinion that a constitutional question within the meaning of s 40A arose, and that its determination was necessary for a complete adjudication of the rights of the parties upon the originating summons.
The option gave Daniel O'Neill a right to acquire the property within a certain time and at a certain sum. It is unnecessary in the present case to consider whether the option gave O'Neill a mere personal right or a right transmissible to his personal representatives or assignees, for he exercised the option in due time -- see In re Cousins, Alexander v Cross , (1885) 30 Ch D 203; Skelton v Younghouse , [1942] AC 571; Sharp v Union Trustee Company , (1944) 69 CLR 539 .
By the exercise of his option, O'Neill became entitled, upon payment of the sum mentioned by the testator, to call for a transfer of the land and to an equitable estate or interest therein -- London and South-Western Railway Company v Gomm , (1882) 20 Ch D 562. And it would be the duty of the personal representative of the testator to make this transfer in a due course of administration of the testator's estate, eg , after payment of his debts, funeral and testamentary expenses. This duty arises not from any agreement or contract made by the personal representative of the testator, but from the disposition of the testator, coupled with the exercise by Daniel O'Neill of the option given to him. No action would lie against the personal representative at law for the breach of any contract with the person to whom the option was given; the remedy for any refusal to carry out the disposition in the testator's codicil would be founded upon equitable principles.
But it was contended that O'Neill was "a purchaser and nothing else -- a favoured purchaser no doubt, but still a purchaser ... and not a devisee of the estate" -- Given v Massey , (1892) 31 LR Ir. 126; Re Wilson, Wilson v Wilson , [1908] 1 Ch 839. Those cases decide that the Real Estate Charges Act (Locke King's Act) does not apply to the case of a person to whom an option to purchase land at a fixed price is given by will, because a disposition of that character signifies, I think, a "contrary or other intention," and also because in those cases the intention of the testator was upon the proper construction of the testamentary dispositions before the court to place the beneficiary in the same position as any outside purchaser would have occupied. It is not, perhaps, inaccurate for the purposes of that Act to say that the person to whom an option to purchase is given occupies the same position as a purchaser, and is not in the same position as a devisee of the property.
In my opinion the right of Daniel O'Neill to call for a transfer of the land to him of the land mentioned in the disposition of the testator is so far clear, but the provisions of the National Security (Economic Organisation) Regulations, Part III., must be examined.
Clause 6 provides --
(1) Except as provided by this Part, a person shall not, without the consent in writing of the Treasurer: ( a ) purchase any land; ( b ) take an option for the purchase of any land; ( c ) take any lease of land; ( d ) take a transfer or assignment of any lease of land; or ( e ) otherwise acquire any land. (2) Nothing in this regulation shall prevent ... ( d ) the acquisition of land by way of gift.
Clause 8 provides --
Nothing in this Part shall prevent ... ( d ) the vesting in the personal representative of a deceased person, in his capacity as such, of any property or any interest in any property; ( e ) any transaction which vests any property, or any interest in property, in any trustee of the estate of a deceased person ... in his capacity as a trustee; ( f ) any transaction which is without consideration in money or money's worth and the purpose of which is to vest any property, or any interest in property, in any person beneficially entitled thereto under or by virtue of any will or intestacy.
The language of cl 6 is extremely wide, and cannot, I should think, be controlled by what is called the ejusdem generis rule of construction -- Larsen v Sylvester and Co ., [1908] AC 295; Thorman v Dowgate Steamship Co Ltd ., [1910] 1 KB 410. Still, the provisions of the Regulations lead me to the conclusion that they do not extend to the devolution of property upon death or the disposition of property by will. The words of cl 6 are that a person shall not, without the consent of the Treasurer, do various acts, eg , purchase or otherwise acquire land.
A testator does not enter into transactions with anyone. He makes dispositions of his property, which in the case of devisees of land often operated of their own force and still do in some cases -- cf. Robertson v Deputy Federal Commissioner of Land Tax , 65 CLR 338 at p 347, [1942] ALR 237 , 239. O'Neill purchased nothing, he took no option, he acquired nothing by any transaction with the testator or with his personal representative. The terms of the testamentary disposition and the exercise by O'Neill of his option gave him whatever interest he has in the land.
Primá facie , therefore, the exercise by O'Neill of his option and the transfer to him of the land by the legal personal representative of the testator does not, on a proper construction of cl 6 (1), fall within its terms.
And this view is strengthened by subcl (2) ( d ), which provides that nothing in the regulation shall prevent the acquisition of land by way of gift which in the main excludes testamentary dispositions.
Again, in cl 8 there is a provision excluding from the operation of the regulation the vesting in the personal representatives of a deceased person in his capacity as such any property, and also any transaction which vests any property in any trustee of the estate of a deceased person. And in cl 7 there are provisions excluding from the operation of the Regulations the disposition of shares, stocks and debentures, by way of gift, by will, or in the exercise of a power of appointment by will.
But there is the provision in cl 8 of the Regulations: Nothing in this Part shall prevent any transaction which is without consideration in money or money's worth and the purpose of which is to vest any property, or any interest in any property, in any person beneficially entitled thereto under or by virtue of any will or intestacy. The exclusion of transactions for consideration in money or money's worth from this exemption assists the argument that the exercise of his option by O'Neill and the execution of a transfer to him upon payment of the sum of £6500 pursuant to the terms of the will, constitutes an acquisition of land by him within the scope of the Regulations. But the exclusion of transactions for consideration in money or money's worth from the operation of Part III. of the Regulations narrows the operation of the Regulations, but affirmatively does not enlarge the prohibition contained in cl 6. The words were probably inserted to exclude from the exemption in cl 8 ( f ) transactions for consideration in money and money's worth between beneficiaries under a will or in an intestacy and their assignees. The words cannot be ignored by a court of construction, but they do not compel or require a construction of cl 6 which is opposed to its natural signification and to the scope and provisions of the Regulations as a whole.
The result is that this appeal should be allowed, the answers given by the order of the Chief Justice to the first and third questions set forth in the originating summons set aside, and instead thereof the first and third questions should each be answered, "Yes."