Patel v Singh [1979] FJLawRp 35; [1979] 25 FLR 54 (16 January 1979)

[1979] 25 FLR 54

IN THE SUPREME COURT OF FIJI
KANTIBHAI DHORIBHAI PATEL
v
BRIJLAL SINGH

[SUPREME COURT, (Williams, J.) 16 January, 1979]
Civil Jurisdiction

Probate - Sole beneficiary liable for debt of testator but only to the extent of the amount of assets received from Public Trustee as Administrator.

B. C. Patel for Plaintiff
G. P. Shankar for Defendant

Action by a shopkeeper against husband of the deceased customer who had signed an undertaking to repay a debt of $1,514.87 with interest at 10%.

The customer died on 22 February, 1972. Letters of Administration were granted to the Public Trustee on 14 June 1973. He advertised appropriately in the Gazette and Fiji Times and then transferred to the defendant husband the remaining assets of the wife's estate on 13 April, 1975 including a lease of Native Land.

The plaintiff did not claim against the Public Trustee because he did not notice the advertisement in the Gazette. He sought a declaration that deceased's undertaking to pay the $1,513.87 was binding in the debtor and an order under the Trustee Ordinance Cap. 224 that the defendant should pay the said amount.

Held: The plaintiff, having failed to lodge a claim with the Administrator, (Public Trustee) had the right of pursue any of the deceased's estate then in the hands of the defendant as her sole beneficiary.

The defendant admitted that the value of assets transferred was $380. He was not a trustee for the estate or its creditors, but only accountable for the value of what he received - not, for example, an enhanced value several years later.

No cases were referred to.

WILLIAMS, J.:

This action is brought by a shop-keeper against the husband of a deceased customer.

The customer had allegedly signed an agreement Ex. 2 on 22nd May, 1971, undertaking to repay a debt of $1,513.87 with interest at 10%. She died on 22/6/72 and letters of administration were granted to the Public Trustee on 14th June, 1973. The Public Trustee transferred to the defendant the remaining assets of the wife's estate on 13th April, 1975, including a lease of native land.

In his Statement of Claim the plaintiff alleges that the lease is worth $2,600 but that is denied in the Statement of Defence.

It is accepted that the Public Trustee advertised in the Gazette and the Fiji Times prior to transferring the remainder of the deceased woman's estate to her husband. The plaintiff says that he did not notify the Public Trustee of his claim against the estate because he did not notice the advertisement in the Gazette. Now he seeks a declaration that the deceased's alleged undertaking to pay the $1,513.87 is valid and binding on the debtor named therein; and for an order under S.61 of the Trustee Ordinance Cap. 224 that the defendant should pay the amount away under the agreement Ex. 2 (supra) signed by the deceased debtor.

The Statement of Claim states that the debt at the time of the issue of the writ amounted to $2,545 when interest at 10% is calculated, i.e. upto 31/3/78.

I do not believe the defendant's evidence that his wife never dealt with the plaintiff.

I am satisfied on the plaintiff s evidence which I accept that the deceased woman was a customer who purchased from his shop from time to time and that she became indebted to him and signed pro-notes, and that these were consolidated into a total debt of $1,513.87 which she acknowledged under the document dated 22/5/71, Ex.2. I am satisfied that it has not been repaid at the date of her death.

Although the creditor did not lodge his claim with the Public Trustee he still had the right to pursue any of the deceased's estate which is in the hands of the defendant as her sole beneficiary. However, I am of the view that he cannot claim more from the defendant that the latter actually received.

In cross-examination, the defendant admitted that the house and furniture were worth $380.00.

The lease is about 2³/4 acres and it expired in June 1978. At the present time it is practically valueless unless and until a renewal is granted under the Agricultural Landlord & Tenant Ordinance.

The plaintiff, in satisfaction of the debt, can only recover from the defendant such sum or its equivalent as he received from the Public Trustee.

How much was the lease worth in 1975 when the Public Trustee transferred it to the defendant? It is only 2³/4 acres of which 1 ¼ acres can be cultivated. It is native leasehold. On those facts it could not be worth much. A factor which reduces its value at the time it passed into the defendant’s hands is that the lease only had 3 years to run.

One has to bear in mind that the defendant is not an administrator or trustee. If a trustee improves that which he holds on trust the increase in value ensures for the benefit of the estate until such time as he has completely administered it. A beneficiary is not a trustee for the estate or its creditors. He is only accountable for the value several years later. If that were not so a creditor for $5000 could wait for some years after a beneficiary has taken an estate worth $1000 in rough undeveloped land until it is cleaned, cultivated and planted along with various improvements. Once the property's value was enhanced to over $5000 the creditor would be able to sue for and recover his $5000 from the beneficiary. Such an interpretation of the law would be most unfair. The situation could be further aggravated if the debt, as in this case, carried interest at 10%. The beneficiary would be working to maintain the creditor's investment long after the debtor had died.

In the instant case the defendant received in 1975 a very small holding with 3 years to run along with a rough house and some furniture. He cannot, in my view, be made to account for more than the value of that property in 1975 when he received it. I do not know how much this almost expired lease was worth in 1975; there has been no evidence in that respect and it is not for me to guess its value as at the time the defendant received it. Had the plaintiff made inquiries of the Public Trustee he would have had some idea of the valuation placed on the lease at the time of the death and at the time it was conveyed to the defendant. The only evidence which appears as to the value of the estate is in the form of the defendant's own admissions, that is $380.00 for the house and the furniture. Even that figure may not be reliable because the value of the house depends in some measure upon its having a reasonably permanent site. If it had to be pulled down soon after its sale it could be worth much less.

Accordingly I come to the conclusion that the defendant is liable to the plaintiff in the sum of $380.00 and I enter judgment for that amount in favour of the plaintiff.

The defendant will pay the costs which I fix at $60.00.

Judgment for the Plaintiff.