Twigg v Twigg [2022] NSWCA 68

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Twigg v Twigg [2022] NSWCA 68 Hearing dates: 18, 19 March 2021 Date of orders: 4 May 2022 Decision date: 04 May 2022 Before: Bell CJ and Payne JA at [1]; Brereton JA at [11]. Decision: (1) Dismiss the motion filed on 17 February 2021 for leave to amend the notice of appeal. (2) Dismiss the appeal. (3) Allow the cross-appeal in part. (4) Order that the appellants pay the respondents' costs of the appeal and cross-appeal. (5) Direct that the respondents bring in short minutes to give effect to this judgment, including with respect to any additional relief sought on the basis of the outcome of the cross-appeal. Catchwords: EQUITY – Fiduciary duties – Breach – Where director of corporate trustee caused trust funds to be distributed to himself – Whether written resolutions effecting valid distribution were adopted by relevant date – Whether director had been delegated authority to make distributions alone – Whether trust monies held on constructive trust EQUITY – Trusts and Trustees – Constructive Trusts – Whether director liable for breach of trust as trustee de son tort – Pre-requisite that one must assume the trust by purporting to act as trustee – Finding that acting in capacity as director of corporate trustee, even without authority and in breach of fiduciary duties, does not alone constitute assumption of the trust – Holding that director not liable as trustee de son tort EQUITY – Trusts and Trustees – Whether director acted "dishonestly" in the context of postponement of the statutory limitation period or equitable equivalent – Where director of corporate trustee was entrusted by other director to manage most company affairs alone – Whether director held honest belief that he was entitled to deal with trust proceeds as he did – Finding that director deliberately withheld information from other director that may have caused her to object to his decisions regarding trust assets – Finding that director's conduct involved dishonesty in the form of conscious wrongdoing and active concealment EQUITY – Defences – Laches – Knowledge of ability to bring claim – Whether means of knowledge is as good as knowledge – Requirement of knowledge of the relevant facts, although not necessarily of the rights to which they give rise EQUITY – Tracing – Whether property and its commercial proceeds were traceable – Extent to which property was purchased with proceeds of sale of trust assets in breach of trust – Where trust monies were loaned by constructive trustee to purchaser of property and repaid before property was purchased – Where purchaser was alter ego of constructive trustee – Finding that property was effectively purchased by constructive trustee and was therefore traceable property, along with its proceeds LIMITATION OF ACTIONS – Equity – Application of Limitation of Actions Act 1958 (Vic) – Section 21(2) does not apply to actions for breach of fiduciary duty in respect of remedial constructive trusts imposed by Court – Section 5 does not apply to claims for an account in equity, except by analogy LIMITATION OF ACTIONS – Equity – Application of limitation periods by analogy – Claims for proprietary relief and equitable compensation – Claims determined to be within analogy of Limitation of Actions Act 1958 (Vic), s 5, for application of equivalent equitable limitation period Legislation Cited: Corporations Act 2001 (Cth), s 81, s 198C, s 198D, s 248B, s 1317K, s 1323 Limitation Act 1969 (NSW), s 47, s 55 Trustee Act 1925 (NSW), s 69 Limitation of Actions Act 1958 (Vic) s 5, s 21, s 27 Trustee Act 1958 (Vic), s 3(1) Limitation Act 1935 (WA), s 3, s 38 Judicature Act 1873 (UK), s 25(2) Limitation Act 1939 (UK), s 19 Limitation Act 1980 (UK) s 21, s 23, s 38 Trustee Act 1888 (UK), s 8(1) Trustee Act 1925 (UK), s 68(17) Cases Cited: Allcard v Skinner (1887) 36 Ch D 145 Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337; [1981] HCA 1 Ashton, In the marriage of (1986) 11 Fam LR 457; (1986) FLC 91-777 Australasian Performing Right Association Ltd v Austarama Television Pty Ltd [1972] 2 NSWLR 467 Auzhair Supplies Pty Ltd (in liq), Re (2013) 272 FLR 304; (2013) 92 ACSR 554; [2013] NSWSC 1 Auzhair Supplies Pty Limited v Roy Gerace [2014] HCASL 231 Barker v The Duke Group Ltd (in liq) (2005) 91 SASR 167; [2015] SASC 81 Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd [2006] 1 All ER 333 Barnes v Addy (1874) LR 9 Ch App 244 Barnsley v Noble [2014] EWHC 2657 (Ch) Bath v Standard Land Co Ltd [1911] 1 Ch 618 Beckford v Wade (1805) 17 Ves 87 Betjemann v Betjemann [1895] 2 Ch 474 Bofinger v Kingsway Group Ltd (2009) 239 CLR 269; [2009] HCA 44 Bonney v Ridgard (1784) 1 Cox Eq Cas 145 Bradford Old Bank v Sutcliffe [1918] 2 KB 833 Bridgman v Gill (1857) 24 Beav 302 Burdick v Garrick (1870) LR 5 Ch App 233 Burnside v Mulgrew [2007] NSWSC 550 Cambodian Buddhist Society of NSW v Thai [2017] NSWSC 1433 Caron and Seidlitz v Jahani and McInerney in their capacity as liquidators of Courtenay House Pty Ltd (in liq) & Courtenay House Capital Trading Group Pty Ltd (in liq) (No 2) (2020) 102 NSWLR 537; 382 ALR 158; [2020] NSWCA 117 Cattley v Pollard [2007] Ch 353, [2007] 2 All ER 1086; [2007] 3 WLR 317; [2006] EWHC 3130 (Ch) Central Bank of Nigeria v Williams [2013] QB 499 Chase v Chase [2020] NSWSC 1689 Cia de Seguros Imperio v Heath (REBX) Ltd (formerly C E Heath & Co (North America) Ltd) [2000] 2 All ER (Comm) 787 Clanricarde v Henning 30 Beav 180; 30 LJ Ch 865 Clarkson v Davies [1923] AC 100 Cohen v Cohen (1929) 42 CLR 91 Commercial Union Insurance Company of Australia Limited v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Crossman v Sheahan [2016] NSWCA 200; (2016) 115 ACSR 130 Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371; [1986] HCA 25 Darley Australia Pty Ltd v Walfertan Processors Pty Ltd [2012] NSWCA 48; (2012) 188 LGERA 26 Davidson & Davidson (1990) 14 Fam LR 817; (1991) FLC 92-197 Di Sante v Camando Nominees Pty Ltd [2000] VSC 211 Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234; [1984] HCA 17 Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366; [2003] 2 All ER (Comm) 451 Ecclesiastical Commissioners v North Eastern Railway Co (1877) 4 Ch D 845 Endresz v Commonwealth of Australia (2019) 273 FCR 286; [2019] FCAFC 197 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 Farrow Finance Co Ltd (in liq) v Farrow Properties Pty Ltd (in liq) (1997) 26 ACSR 544 Federal Republic of Brazil v Durant International Corp (Jersey) [2016] AC 297; [2015] UKPC 35 Feiglin v Ainsworth [2011] VSC 454 Feiglin v Ainsworth [2014] VSC 376 Feiglin v Ainsworth [2015] VSCA 326 FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45; [2015] AC 250 Finance & Guarantee Company Pty Ltd v Auswild [2019] VSC 664 Fireproof Doors Ltd, Re [1916] 2 Ch 142 Foskett v McKeown [2001] 1 AC 102; [2000] UKHL 29 Fourniotis v Vallianatos (2018) 56 VR 85; [2018] VSC 369 Frith v Cartland (1865) 2 H&M 417; 71 ER 525 Gerace v Auzhair Supplies Pty Ltd (2014) 87 NSWLR 435; [2014] NSWCA 181 Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 Gosford Christian School Ltd v Totonjian (2006) 201 FLR 424; [2006] NSWSC 725 Greater Pacific Investments Pty Ltd (in liq) v Australian National Industries Ltd (1996) 39 NSWLR 143 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC Gwembe Valley Development Co Ltd v Koshy (No 3) [2003] EWCA Civ 1048, [2004] 1 BCLC 131 Halton International (Holdings) Inc Sarl v Guernroy Ltd [2006] WTLR 1241 Hancock Family Memorial Foundation Ltd v Porteous (2000) 22 WAR 198; [2000] WASCA 29 Harris & Harris (1991) 15 Fam LR 26; (1991) FLC 92-254 Harris v Knight (1890) 15 PD 170 Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266 Heperu Pty Ltd v Belle (2009) 76 NSWLR 230; [2009] NSWCA 252 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64 House v The King (1936) 55 CLR 499; [1936] HCA 4 Hovenden v Lord Annesley (1806) 9 RR 119, 2 Sch & Lef 607 Jane v Bob Jane Corporation Pty Ltd [2013] VSC 406 JJ Harrison (Properties) v Harrison [2001] EWCA Civ 1467, [2002] 1 BCLC 162, [2002] BCC 729 Kingham v Sutton [2002] FCA 506 Knox County v Ninth National Bank 147 US 91 (1893) L'Estrange v F Graucob, Ltd [1934] 2 KB 394; [1934] All ER Rep 16 Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 Linke v Linke [2018] VSC 505 Mantovani v Vanta Pty Ltd [2021] VSC 771 Mara v Browne [1896] 1 Ch 199 McLean Bros & Rigg Ltd v Grice (1906) 4 CLR 835 McNab v Graham (2017) 53 VR 311; [2017] VSCA 352 Menegazzo v Pricewaterhousecoopers [2016] QSC 094 Morgan v Stephens (1861) 3 Giff 226; 66 ER 392 Murdoch v Mudgee Dolomite & Lime Pty Ltd (in liq) [2022] NSWCA 12; (2022) 398 ALR 658 Nolan v Nolan [2004] VSCA 109 Nowell v Palmer (1993) 32 NSWLR 574; [1993] NSWCA 199 O'Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262; 29 ACSR 148 Orr v Ford (1989) 167 CLR 316; [1989] HCA 4 Paragon Finance plc v DB Thakerar & Co (a firm) [1999] 1 All ER 400; 1 ITELR 735 Pearce v Pearce (1856) 22 Beav 248; 52 ER 1103 Peconic Industrial Development Ltd v Lau Kwok Fai [2009] 5 HKC 135; 11 ITELR 844 Piwinski v Corporate Trustees of the Diocese of Armidale [1977] 1 NSWLR 266 Port Ballidu Pty Ltd v Frews Lawyers [2017] QSC 19 Queensland Mines Ltd v Hudson (1976) ACLC 40-266 Reader v Fried [2001] VSC 495 Reckitt v Barnett Pembroke and Slater Ltd [1928] 2 KB 1244, approved [1929] AC 176 Robins v Incentive Dynamics Pty Ltd (in liq) (2003) 175 FLR 286; (2003) 45 ACSR 244; [2003] NSWCA 71 Savage v Lunn (No 2) [1998] NSWCA 204 Savage v Lunn [1998] NSWCA 203 Selangor United Rubber Estates Ltd v Craddock (No 3) [1968] 2 All ER 1073; [1968] 1 WLR 1555; [1968] 2 Lloyd's Rep 289 Seymour v Seymour (1996) 40 NSWLR 358 Soar v Ashwell [1893] 2 QB 390 Sze Tu v Lowe [2014] NSWCA 462; (2014) 89 NSWLR 317 Tavistock Ironworks Company, Re (1867) LR 4 Eq 233 Taylor v Davies [1920] AC 636 Tito v Waddell (No 2) [1977] Ch 106 Tobin v Broadbent (1974) 75 CLR 378; [1947] HCA 46 United Pan-Europe Communications NV v Deutsche Bank AG [2000] 2 BCLC 461 Urquhart v M'Pherson (1880) 6 VLR(E) 17 Wheatley v Bower [2001] WASCA 293 Williams v Central Bank of Nigeria [2014] AC 1189; [2014] UKSC 10 Williams v Milotin (1957) 97 CLR 465; [1957] HCA 83 Williams-Ashman v Price [1942] 1 Ch 219 Wilson v Moore (1834) 1 My & K 337 Texts Cited: HAJ Ford & WA Lee, Principles of the Law of Trusts, (2nd ed, 1990) HAJ Ford & WA Lee, Principles of the Law of Trusts, (4th ed, 2010) JD Heydon, MJ Leeming & PG Turner, Meagher, Gummow & Lehane's Equity: Doctrine & Remedies (5th ed. 2014 Lexis Nexis Butterworths) RP Meagher, WMC Gummow & JRF Lehane, Equity: Doctrine & Remedies (3rd ed. 1992 Butterworths) NSWLRC 3, First Report on the Limitation of Actions, October 1967 RP Austin, "Trading Trusts", Equity and Commercial Relationships (ed PD Finn, 1987) Category: Principal judgment Parties: Maxwell James Twigg (First Appellant) Twigg Landfill Pty Ltd (Second Appellant) Byron Bay Beach Hotel Properties Pty Ltd (Third Appellant) Twigg Consulting Pty Ltd (Fourth Appellant) B Bay H Pty Ltd (Fifth Appellant) Twigg Investments Pty Ltd (Sixth Appellant) Maly Holdings Pty Ltd (Seventh Appellant) Twigg Property Development Pty Ltd (Eighth Appellant) Twigg Motor Sport Pty Ltd (Ninth Appellant) Vision Motor Sport Pty Ltd (Tenth Appellant) Twigg Motor Racing Pty Ltd (Eleventh Appellant) Surf Street Holdings Pty Ltd (Twelfth Appellant) W & E Twigg Pty Ltd (Thirteenth Appellant) Twigg Co Pty Limited (Fourteenth Appellant) Diane Twigg (First Respondent) Ipswich Landfill Pty Ltd (Second Respondent) Brooklyn Landfill & Waste Recycling Pty Ltd (Third Respondent) Twigg Plant Hire Pty Ltd (Fourth Respondent) Representation: Counsel: B Walker SC, J Evans QC & PM Knowles (Appellants) MR Elliot SC & DK Smith (Respondents)