Opinion Number. 1076

Subject

WAR GRATUITY LODGMENT OF WAR GRATUITY BOND OR CASH WITH COMMONWEALTH BANK TO BE HELD FOR OR PAID TO CLAIMANT: WHETHER PART OF CLAIMANT'S ESTATE ON HIS DEATH: WHETHER BANK ACTS FOR COMMONWEALTH OR CLAIMANT

Key Legislation

WAR GRATUITY ACTS 1920, s. 9 (I)

Date
Client
The Secretary, Department of Defence

The Secretary to the Department of Defence has forwarded for advice the following memorandum:

The following is a copy of a cablegram received from the High Commissioner's Office, London:

War gratuity, deceased soldier. Please advise how we should proceed in following cases:

  1. Claimant's widowed mother deceased prior to receiving notification from D.F.O. that cash payment approved.
  2. Mother's claim with father's consent forwarded Australia mother now deceased no notification issue Bond yet received.
  3. Dischargee deceased prior to receiving notification Bond lodged Bank his behalf.
  1. The procedure followed in connection with payment of war gratuities to claimants resident outside Australia is briefly as under:
  2. Payment by Bond: The Bond is lodged for safe custody with the Commonwealth Bank, Melbourne, which institution issues to the person concerned a safe custody receipt. Upon maturity of the Bond it is intended to arrange through the Bank for payment to the Bond owner.

    Payment by cash: The amount of the gratuity is paid to the Commonwealth Bank for transfer through its agents abroad to the payee.

  3. In this connection I would invite your attention to the Crown Solicitor's opinion in the case of A.B. (deceased) vide your correspondence of 6 November last. In this case the Bond was lying at the Post Office awaiting collection at the date of the payee's death and the Crown Solicitor's opinion reads:
  4. I am of opinion that payment of the war gratuity to B. has never been made and that he died before payment. I am of opinion, therefore, that section 9(1) of the Act applies and that the war gratuity Bond referred to forms no part of the deceased's estate and that the Curator has no claim thereto.

  5. In order to enable decision to be given on the questions raised by the High Commissioner's Office, a further opinion is now requested:
    1. Bond cases: As to whether lodgment of Bond with the Bank for safe custody as indicated in paragraph 2 above constitutes delivery to person concerned and whether therefore if the Bond was so lodged before the date of death of the claimant same forms part of his or her estate.
    2. As to whether the fact that safe custody receipt may not have been dispatched by the Defence Department or the Bank affects the position in regard to recovery of the Bond.
    3. Cash cases: As to whether the lodgment of the cash at the Bank for remittance to the payee abroad constitutes payment to the individual, so rendering the amount part of the estate.
    4. If reply to (c) be in the affirmative whether the Department can recover gratuity in those cases where lodgment of the amount with the Bank was effected after date of death of the person concerned.
  6. A copy of this memorandum has been forwarded to the Secretary to the Treasury.
  7. In view of the fact that a reply to the cablegram mentioned in paragraph (1) above is being deferred pending opinion on the above-mentioned questions, I shall be glad if you will be good enough to furnish your reply at your earliest convenience.

Where a war gratuity Bond is lodged at the Commonwealth Bank in accordance with the procedure adopted in connection with the payment of war gratuity to persons resident outside Australia, payment of the war gratuity is, in my opinion, thereby made to the claimant. The Commonwealth Bank in such a case is, I think, the agent of the claimant for the purpose of receiving payment of the war gratuity and is not the agent of the Commonwealth for the purpose of delivering the Bond to the claimant. That is to say, as soon as the Bond is lodged with the Bank the Bank holds the Bond for and on behalf of the claimant.

This case is distinguished from the case where a Bond is sent to a Post Office for collection by the claimant. In that case the Post Office is, in my opinion, the agent of the Commonwealth for delivering the Bond to the claimant and until the claimant collects the Bond the Bond remains in the hands of the Commonwealth (see Crown Solicitor's Opinion No. 593 of 1 November 1920).

The fact that the safe custody receipt for the Bond is not received by the claimant before his decease does not, I think, affect the question. The safe custody receipt is, in my opinion, merely the acknowledgment by the Bank that it holds the Bond at the disposal of the claimant, and the fact that the claimant does not hold the receipt does not affect his right to the Bond.

As regards cash payment of a war gratuity, the lodgment of cash at the Commonwealth Bank for remittance to a claimant abroad does not, in my opinion, constitute payment to the claimant. In such a case the Commonwealth is using the ordinary means for remitting money to persons outside Australia-the Bank is for that purpose the agent of the Commonwealth. Until the claimant actually receives the money he has not, in my opinion, received payment of the war gratuity.

In my opinion the questions asked in paragraph (4) of the Secretary's memorandum should be answered as follows:

  1. Yes;
  2. No;
  3. No;
  4. Not necessary to consider in view of answer to (c).

[Vol. 17, p. 333]