Supreme Court New South Wales Medium Neutral Citation: Re Estate Nitopi, deceased [2018] NSWSC 1560 Hearing dates: 7 and 8 May 2018 Decision date: 17 October 2018 Jurisdiction: Equity - Probate List Before: Lindsay J Decision: Subject to allowing the parties to be heard as to the form of orders to be made, the plaintiff's statement of claim is to be struck out, with conditional leave to re-plead with the benefit of an order that the plaintiff represent the estate of the deceased in (derivative) proceedings designed to recover property of the deceased alleged to have been misappropriated by the defendants during the deceased's lifetime. Catchwords: CIVIL PROCEDURE — Court administration — Case management – Complex claims across jurisdictional boundaries – Management of proceedings to facilitate determination of real questions in dispute – Administration of deceased estate – Application for revocation of probate combined with derivative suit against executrix and beneficiaries designed to recover estate property allegedly misappropriated SUCCESSION – Executors and administrators – Proceedings against executors and administrators – Application to represent estate in proceedings against executrix – Whether plaintiff is an appropriate party to represent estate – Where executrix declined to assert claims of the kind sought to be made by the plaintiff on behalf of estate – Plaintiff appointed to represent the estate at own risk as to costs – Consequential case management orders made Legislation Cited: Civil Procedure Act 2005 Guardianship and Administration Act 2000 (Qld) Limitation Act 1969 NSW Uniform Civil Procedure Rules 2005 NSW Cases Cited: Baldry v Jackson [1976] 2 NSWLR 415 Bird v Bird (No. 4) [2012] NSWSC 648 Bird v Bird [2013] NSWCA 262; 11 ASTLR 225 Blair v Curran (1939) 62 CLR 464 Coshott v Sakic (1998) 44 NSWLR 667 Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 JD & KJ Zohs Properties Pty Ltd v Ferme [2015] SASC 55 Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR Mao v AMP Superannuation Ltd [2018] NSWCA 72 National Trustees, Executors and Agency Company of Australasia Ltd v Dwyer (1940) 63 CLR 1 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Quek v Beggs (1990) 5 BPR [97 405] Ramage v Waclaw (1988) 12 NSWLR 84 Re Atkinson, deceased [1971]VR 616 Reichel v Magrath (1889) 14 App Cas 665 State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81-423 Steiner v Strang [2012] NSWSC 919 Walton v Gardiner (1993) 177 CLR 378 Williams v Spautz (1992) 174 CLR 509 Texts Cited: GD Dal Pont and KF Mackie, Law of Succession (LexisNexis Butterworths, Australia, 2nd ed, 2017) HS Theobald, The Law Relating to Lunacy (Stevens and Sons, London, 1924) JD Heyden and MJ Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, Australia, 8th ed, 2016) Category: Procedural and other rulings Parties: Plaintiff: Giuseppe Nitopi First Defendant: Cristina Francesca Pirrello Second Defendant: Rosaria Theoharopolous Third Defendant: Christina Nitopi Representation: Counsel: Plaintiff: D Liebhold First Defendant: JS Drummond Second Defendant: R White Third Defendant: FFF Salama Solicitors: Plaintiff: Hunter Lawyers First Defendant: Prime Lawyers Second Defendant: Middleton Gardiner & Associates Third Defendant: Peterson Haines File Number(s): 2014/00327528 Judgment INTRODUCTION 1. Before the Court are competing notices of motion, in proceedings relating to administration of the estate of the late Egidio Nitopi ("the deceased"), which focus attention upon: 1. whether the plaintiff, as a beneficiary, should be permitted to represent the estate of the deceased in pursuit of claims: (i) that the first defendant, as executrix, has to account to the estate for her receipt, during the lifetime of the deceased, of $50,000 which she contends was a gift from the deceased; (ii) that the first defendant be held liable in tort for devastavit or for an analogous breach of fiduciary obligations (for wilful default in administration of the deceased's estate) in that, allegedly in breach of her obligations as executrix, she has not sought to recover from the second and third defendants sums, totalling about $5.4 million, paid out of a bank account of the deceased during his lifetime, which the plaintiff contends were misappropriated, particularly, by the second defendant as the enduring attorney of the deceased; and (iii) that the second and third defendants are liable to account for the property of the deceased received by them. 2. whether any or all of the claims asserted by the plaintiff on behalf of the estate of the deceased: (i) are "statute barred"; or (ii) ought to be dismissed as an abuse of the processes of the Court because they were not pursued, or upheld, in proceedings in the Queensland Civil and Administrative Tribunal (QCAT) – in part, on a referral from the Supreme Court of Queensland – concerned with whether an administrator should be appointed to manage the deceased's estate in substitution for its management by the second defendant as his enduring attorney. 3. whether the fact that the first defendant has been charged with a criminal offence (but not, thus far, convicted of any offence) provides a ground upon which the plaintiff is entitled to support an application (based, essentially, upon an allegation of a failure properly to administer the deceased's estate) for revocation of the grant of probate made to the first defendant in common form. 1. Four features of the proceedings warrant preliminary notice. 2. First, there is no real dispute about the standing of the plaintiff to maintain a derivative suit on behalf of the estate of the deceased in circumstances in which: (a) he is a beneficiary of the estate; (b) he seeks to recover property of behalf of the estate; (c) the first defendant has declined to assert on behalf of the estate, in her capacity as executrix, claims sought to be advanced by the plaintiff: (d) one of the persons from whom the plaintiff seeks to recover property on behalf of the estate is the first defendant in her personal capacity; (e) all affected persons have been joined in the proceedings as parties; and (f) the plaintiff is both amenable to costs orders and bound to conduct the derivative suit at his own risk as to costs: Re Atkinson, deceased [1971]VR 616 at 617; Ramage v Waclaw (1988) 12 NSWLR 84 at 91; Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 436-437. 3. Secondly, the plaintiff has chosen to plead a complex case across conventional jurisdictional boundaries. He applies for orders grounded upon an exercise of probate jurisdiction (insofar as he seeks an order for revocation of a grant of probate made to the first defendant, together with consequential orders) and, at the same time, he applies for equitable relief by way of a derivative suit in which he seeks to represent the deceased's estate, as well as common law damages for devastavit. 4. In the context of an estate that has been substantially administered, leaving little more to administer than the claims asserted in the derivative suit and property about which there is evidently no substantial controversy, the pursuit of a probate case at the same time is of doubtful utility. 5. That does not mean that the several forms of claim cannot, or should not, be pleaded together. What it does mean is that the Court might be obliged, in case management of the proceedings, to give consideration to whether an order should be made (pursuant to rule 28.2 of the Uniform Civil Procedure Rules 2005 NSW or otherwise) for particular questions to be separately determined, or held in abeyance pending an orderly determination (or, at least, definition) of real questions in dispute. 6. Thirdly, although there may be some merit in the plaintiff being allowed, and required, to plead his claim in the devastavit against the first defendant in circumstances in which it dovetails with his claim for an order that the grant of probate made to her be revoked, case management considerations might require that any devastavit claim, properly pleaded, be deferred until after the determination of the derivative suit. 7. Fourthly, insofar as the defendants contend that, as a consequence of proceedings in QCAT and the Supreme Court of Queensland, the derivative suit is, in whole or part, an abuse of the processes of the Court, they fail to appreciate the true character of the Queensland proceedings and a critical distinction between those proceedings and the derivative suit. 8. The Queensland proceedings were essentially an exercise of protective jurisdiction in which the focus for attention was whether any (and, if so, what) orders were required by way of protective management (in Queensland, it might more correctly be described as administration) of the person or estate of the deceased. The derivative suit, to the extent that the plaintiff has standing to sue on behalf of the deceased's estate, is, in essence, an adversarial claim for equitable relief on behalf of the deceased's estate. 9. There is, on the defendants' side of the record as well as that of the plaintiff, a need to recognise the functionality of jurisdictional categories. THE DECEASED'S ESTATE 1. The deceased died on 16 May 2014 leaving property in NSW and a will dated 25 September 1997. 2. On 2 March 2015 this Court granted to the first defendant probate of the deceased's will in common form. 3. The will named the deceased's estranged wife (the first defendant) as executrix and, in substance, divided his estate between their three children: the plaintiff, the second defendant and the third defendant. 4. The value of the deceased's estate exceeded $20 million and was comprised of assets in New South Wales, Queensland and Italy. 5. Most of the estate has been distributed through a series of interim distributions made by the first defendant as executrix. However, the plaintiff and the defendants are at issue about whether sums (totalling $5,448.141.03) said by the plaintiff to have been received by the defendants, in varying amounts, during the lifetime of the deceased (at times when he was, or arguably was, incapable of managing his own affairs) should be restored to the estate. 6. At one stage (as embodied in orders made by White J on 11 August 2016) agreement was reached about the future course of administration of the deceased's estate; but discord became the order of the day when the plaintiff discovered that, during the deceased's lifetime, large sums had been transferred to the defendants out of the deceased's bank account. 7. Interlocutory orders were made by Rein J on 24 and 27 July 2017, and by Kunc J on 28 August 2017, designed to preserve property and to allow uncontroversial steps to be taken in administration of the deceased's estate. THE NATURE AND EVOLUTION OF THE PLAINTIFF'S CLAIMS 1. By a statement of claim filed on 8 February 2016, the plaintiff sought orders for the grant of probate made to the first defendant to be revoked and for a grant of administration, with the will annexed, to be made to him. The first defendant was the only defendant named in the statement of claim. 2. An "amended statement of claim" filed on 27 July 2016 added a claim for an order that the first defendant (still the only named defendant) file, verify and pass accounts in respect of her administration of the deceased's estate. 3. By orders made on 6 November 2017, the second and third defendants were joined in the proceedings and, on terms that reserved to the defendants a right to move to set aside the order for a grant of leave, the plaintiff was granted leave to amend the amended statement of claim. 4. Pursuant to that grant of leave, the plaintiff filed a "further amended statement of claim" on 13 November 2017. 5. By that pleading, he sought additional orders to the following effect: 1. an order that the plaintiff be appointed (pursuant to rule 7.10 of the Uniform Civil Procedure Rules 2005 NSW) to represent the estate of the deceased in recovery action against the defendants referable to specified transactions (said to have occurred between 19 February 2008 and 17 March 2014 or thereabouts) by which property of the deceased was transferred, in different amounts, to the defendants. 2. an order that the defendants account to the deceased's estate for property of the deceased received by them as a result of the specified transactions. 3. consequential relief in the form of declarations of constructive trust, orders for the payment of equitable compensation, and damages. 1. Allegations in support of those claims for relief included allegations of undue influence, and breaches of fiduciary duties, against the second and third defendants – based, in part, upon the second defendant's alleged misuse of an enduring power of attorney executed in her favour by the deceased on 31 October 2008. 2. By an order made on 4 December 2017, the plaintiff was granted leave to amend the "further amended statement of claim", reserving to the defendants an entitlement to apply for summary relief referable to it. 3. Pursuant to that grant of leave, a "second further amended statement of claim" was filed on 18 December 2017. 4. That document refined the plaintiff's claim in devastavit against the first defendant. It alleged that the first defendant was under a duty to call in and collect the assets of the deceased's estate; and that, as a consequence of the first defendant's breach of her duties as executrix, the estate has suffered "loss and damage" to the extent that moneys claimed against the second and third defendants are not recoverable from them. THE COMPETING MOTIONS BEFORE THE COURT 1. From these pleadings have emerged a notice of motion from each party. 2. By a notice of motion filed on 27 November 2017, the first defendant, applies to set aside the order made on 6 November 2017 granting the plaintiff leave to amend his statement of claim. 3. By a notice of motion filed on 25 January 2018, the second defendant seeks an order (under rule 13.4(1) of the Uniform Civil Procedure Rules) for summary disposal of the proceedings against her or, in the alternative, an order (under rule 14.28(1) of the Uniform Civil Procedure Rules) that the plaintiff's pleading be struck out. 4. By a notice of motion filed on 29 January 2018, the third defendant seeks similar relief on her own behalf and, in the alternative, an order that the order made on 6 November 2017 for her joinder in the proceedings be set aside; as argued, the claim for this alternative form of order adds nothing to a claim for summary dismissal of the proceedings. 5. Informed by challenges made to his pleadings, the plaintiff filed a notice of motion on 16 April 2018 in which he seeks leave to amend his statement of claim in the terms of a draft "third further amended statement of claim". 6. By an order made on 7 May 2018, all four notices of motion have been heard together. 7. Given that the plaintiff's draft "third further amended statement of claim" is the pleading which represents the case which the plaintiff now seeks to advance, it is appropriate to focus attention on that document rather than earlier iterations of the statement of claim. It is, in any event, an evolutionary form of the "second further amended statement of claim". 8. In substance, there are two competing types of application before the Court. First, on the plaintiff's side of the record, there is an application for amendment of a statement of claim in order to facilitate the plaintiff's proceeding against all three defendants. Secondly, on the defendants' side of the record, there are applications which (transcending mere opposition to the plaintiff's application) seek, in one guise or another (by reference to UCPR rule 13.4, UCPR rule 14.28 or otherwise), orders for summary determination of the proceedings against them. THE PLAINTIFF'S CLAIM FOR REVOCATION OF PROBATE GRANT 1. The plaintiff's claim for revocation of the first defendant's grant of probate, on the ground of an alleged failure on the part of the first defendant to administer the estate of the deceased properly, is not an essential component of the plaintiff's claims against the defendants. 2. That is because: (a) rightly or wrongly, the first defendant has taken no action to recover property from the second or third defendants, and she has denied any liability on her part to account for money received by herself; (b) as a beneficiary, it is open to the plaintiff to sue the defendants in a derivative suit, on behalf of the deceased's estate, in circumstances in which the first defendant, as executrix, is unable or unwilling to do so; and (c) all affected parties have been joined in the proceedings. 3. There is presently no compelling reason for the plaintiff's application for the first defendant's grant of probate to be revoked (and his associated application for an alternative grant of administration be made) to be heard together with other questions in the current proceedings. 4. I accept, as the first defendant contends, that the fact that she has been charged with (but not convicted of) a criminal offence may have no bearing upon her fitness to retain the grant of probate made in her favour; but neither can it be said necessarily to be irrelevant to the plaintiff's revocation application. 5. Nevertheless, in the circumstances of the current proceedings, paying due deference to the deceased's nomination of the first defendant as his executrix, the central focus of the application for revocation orders, if pressed, is likely to be upon what is necessary to ensure due administration of the deceased's unadministered estate. 6. That focus directs attention, principally, to the recoverability or otherwise of property on behalf of the deceased's estate. But for resolution of disputes about the recoverability of property via the derivative suit, administration of the deceased's estate has been substantially completed. 7. Other property remains to be distributed. However it is not obviously at risk, and what remains to be completed in administration of the estate appears, at this stage, not to require a change in the identity of the deceased's legal personal representative. 8. Against that, the plaintiff's maintenance in these proceedings of his application for the grant of probate made in favour of the first defendant to be revoked (with a consequential grant of administration made in his favour) serves to impede the orderly conduct of real questions in dispute relating to the recoverability, or otherwise, of money paid out of the deceased's bank account during his lifetime. 9. In these circumstances, my determination is that, if (as I propose) the plaintiff is given the benefit of an order that he represent the estate of the deceased in these proceedings, he should not be permitted to maintain his application for revocation orders without the leave of the Court. The interests of justice and case management considerations both point in that direction. 10. If the plaintiff apprehends that there is a real risk to assets of the deceased's estate pending the determination of the present proceedings, it remains open to him (at his own risk as to costs) to apply for an order that a receiver and manager be appointed to protect estate property: Steiner v Strang [2012] NSWSC 919 at [12]. THE PLAINTIFF'S DEVASTAVIT CLAIM AGAINST THE FIRST DEFENDANT 1. A concern for due administration of the deceased's (unadministered) estate is ostensibly what lies behind the plaintiff's claim in against the first defendant, perhaps overlaid with a concern about whether the second and third defendants have the means to satisfy any judgment entered against them. 2. The nature of a devastavit claim is explained in JD & KJ Zohs Properties Pty Ltd v Ferme [2015] SASC 55 at [7]-[11] and Bird v Bird (No. 4) [2012] NSWSC 648 at [104] et seq, subject to Bird v Bird [2013] NSWCA 262; 11 ASTLR 225. 3. An executor is under a positive duty to call in and collect assets of the deceased and, if need be, to institute proceedings to recover estate assets. A wilful failure to discharge that duty can constitute both a tort (an action on the case, akin to an action in negligence) and a breach of fiduciary obligations giving rise to an entitlement to equitable compensation: GD Dal Pont and KF Mackie, Law of Succession (LexisNexis Butterworths, Australia, 2nd ed, 2017), paragraphs [12.43]-[12.45] and [12.59]. A debt having been proved due to an estate, a burden is thrown on the executor to show why he or she did not get it in: National Trustees, Executors and Agency Company of Australasia Ltd v Dwyer (1940) 63 CLR 1 at 14 and 17-18. JD & KJ Zohs Properties Pty Ltd v Ferme [2015] SASC 55 at [9]. 4. Insofar as the plaintiff pleads devastavit as a cause of action in tort, damage is the gist of the action: Dal Pont and Mackie, Law of Succession, paragraph [12.44]. 5. Ordinarily, a common law cause of action must be complete at the time an action founded on it is commenced: Baldry v Jackson [1976] 2 NSWLR 415 at 419. The first defendant contends that it is not open to the plaintiff to sue her, as an alleged defaulting executrix, in the same proceedings in which he seeks to recover, on behalf of the deceased's estate, property which he contends she ought to have recovered. She contends that an action in devastavit cannot lie until after the determination of the current proceedings and an unsuccessful endeavour to recover property from her (in her personal capacity) and her co-defendants. 6. No detailed submissions have been made about the potential operation of section 65 of the Civil Procedure Act 2005 NSW and, given imprecision in the way in which (after hesitant steps towards such a claim) the plaintiff presently pleads a claim in devastavit, it is not entirely clear how sections 64-65 might apply to such a claim, ostensibly made belatedly but perhaps premature. 7. Section 64(3) of the Civil Procedure Act 2005 permits a pleading to be amended even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings - in which case, the date of commencement of the proceedings in relation to that cause of action, is (subject to section 65 of the Act) taken to be the date upon which the amendment is made. 8. Section 65(2)of the Civil Procedure Act 2005 provides, inter alia, that the Court can grant leave for originating process to be amended even though a limitation period for the commencement of proceedings has expired if the effect of the amendment is "to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the Court's opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process". Section 65(3) provides that, unless the Court otherwise orders, an amendment made under section 65 is taken to have had effect from the date on which the proceedings were commenced. 9. It is difficult to see how those sections might operate in the context of pleadings in which: (a) the plaintiff has moved but slowly towards a pleading of the elements of a devastavit claim; (b) he has not pleaded or particularised his claims with the precision necessary to assess whether and how the Limitation Act might operate; and (c) the defendants have yet to plead a Limitation Act defence so as to crystallise a time at which, by operation of the Act, causes of action relied upon by the plaintiff might reasonably be said to have been extinguished. 10. In his original statement of claim the plaintiff pleaded, inter alia, that the first defendant was obliged to administer the estate of the deceased but had failed to carry out her obligations. Those allegations were repeated in the amended statement of claim, with elaboration in each of the further amended statement of claim and the second further amended statement of claim. The first time a claim for an accounting, equitable compensation or damages was expressly claimed against the first defendant was in the further amended statement of claim. The first time the plaintiff claimed against the first defendant an explicit claim for a judgment in respect of moneys unable to be recovered from the second and/or third defendants was in the second further amended statement of claim. 11. If (as the plaintiff alleges) the first defendant was in breach of her executorial duties (in failing or refusing to commence proceedings against the second and third defendants), so as to entitle the plaintiff to commence a derivative suit, then the first defendant will have been, or at least arguably would have been, in breach of trust: JD Heyden and MJ Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, Australia, 8th ed, 2016), paragraph [23]-[03]. 12. However, this is not a case in which the plaintiff, before 13 November 2017, asserted against the first defendant anything like a claim in devastavit. There appears to be no clear scope for attracting the operation of section 65(2) of the Civil Procedure Act. 13. The first defendant complains, correctly, that neither the "second further amended statement of claim" (filed on 18 December 2017), nor the draft "third further amended statement of claim" , pleads against her with any precision: 1. the loss or damage allegedly suffered by the estate of the deceased as a necessary element in a tortious cause of action in devastavit; or 2. a breach of fiduciary obligations necessary to ground a claim to equitable compensation, vis a vis any property of the deceased misappropriated by the second or third defendants. 1. A source of problems with the plaintiff's pleadings, and in broader case management of the proceedings, may be that: 1. in his pleadings, the plaintiff endeavours to support a tortious claim in devastavit against the first defendant, in the same proceedings in which he seeks to advance a related derivative suit against the second and third defendants, by anticipating that those defendants might plead defences under the Limitation Act 1969 NSW; 2. in fact, the second and third defendants have yet to file a Defence to any version of the statement of claim, and the first defendant's Defence (filed on 18 March 2016) does no more than traverse allegations made in the statement of claim; 3. no Limitation Act defence has as yet been pleaded by any defendant, the potentiality for such a defence having been raised only in submissions on the motions presently before the Court; and 4. if, as the first defendant has contended in submissions, time began to run against the deceased at the times sums of money were transferred out of his bank account in favour of the defendants then, on one view of how the Limitation Act operates, at least some claims against the second and third defendants became "statute barred" on 16 May 2017, after the commencement of these proceedings. 1. Although I propose, in case management of the proceedings, to regulate the pleading of a devastavit claim in the current proceedings, I do not intend to preclude the plaintiff from advancing such a claim should he be able, properly, to plead and particularise a case. 2. I apprehend that, if there is a foundation for a devastavit claim, it is likely best to be able to be dealt with in fresh proceedings commenced for that purpose after the close of pleadings in the current proceedings. THE PLAINTIFF'S DERIVATIVE SUIT FOR EQUITABLE RELIEF The Central Questions 1. Primary attention, at this stage of the proceedings, should be placed upon contentions that: (a) proceedings for recovery of estate property are "statute barred"; and (b) the proceedings are an abuse of the processes of the court (applying principles associated with Reichel v Magrath (1889) 14 App Cas 665 at 668-669 and elaborated by reference to State Bank of New South Wales Ltd v Stenhouse Ltd (1997) Aust Torts Reports 81-423) because they seek to re-litigate questions said to have been litigated in both QCAT and the Supreme Court of Queensland and determined by QCAT. 2. In the course of the hearing of the motions before the Court, the third defendant withdrew contentions that the Queensland proceedings attracted principles governing res judicata (Blair v Curran (1939) 62 CLR 464) or the principle enunciated in Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 ordinarily identified by reference to Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. No case was asserted in terms of an alleged issue estoppel as distinct from res judicata and the Anshun principle. The Property Sought to be Recovered on behalf of the Deceased's Estate 1. The sums of money which the plaintiff seeks to recover on behalf of the estate, enumerated in paragraph 6M of the draft "third further amended statement of claim", were transferred out of the deceased's bank account between 19 February 2008 and 17 March 2014. They total $5,448,141.03. 2. Of those sums: 1. the first defendant admits that she received (she says as a gift) the sum of $50,000 on 20 August 2009. 2. the second defendant admits that she received two sums totalling $1,937,240 (namely, $185,000 on 24, June 2008 and $1,752,240 on 5 August 2008). 3. the third defendant admits that she received 12 sums totalling $3,196,000 (namely, $100,000 on 19 February 2008; $589,000 on 21 April 2008; $185,000 on 2 July 2008; $598,000 on 24 July 2008; $15,000 on 2 September 2008; $500,00 on 23 October 2008; $150,000 on 3 April 2009; $50,000 on 28 July 2009; $332,000 on 14 August 2009; $65,000 on 2 September 2009; $360,000 on 6 October 2009; and $252,000 on 28 October 2009). 4. a payment of $202,000 on 4 June 2010 represents funds (still available to the estate) presently the subject of a freezing order made by the Supreme Court of Queensland in the protective proceedings. 5. four payments totalling $49,161.03 are said by the defendants to have been paid to or at the direction of the deceased (namely, $10,213.36 on 23 December 2008; $16,588.93 cents on 28 January 2009; $11,908.74 cents on 24 February 2009; and $10,450 on 1 June 2009). 6. one payment (namely, $13,740 on 17 March 2014) is said by the defendants to relate to the deceased's funeral expenses. 1. The parties' principal contest relates to the recoverability, or otherwise, of property associated with the first three categories of transaction, although it is not presently clear whether the defendants' characterisation of the last two categories of transaction is accepted. 2. It is common ground that the $202,000 affected by a freezing order remains available to the deceased's estate. On the defendants' case, that sum (with any accrued interest) is the only substantial estate property remaining to be administered. 3. No submissions were made as to the location and onus of proof in characterisation of payments made out of the deceased's bank account: cf, Coshott v Sakic (1998) 44 NSWLR 667 at 671D-672A. The Defendants' Limitation Defence 1. In his draft "third further amended statement of claim" the plaintiff anticipates, in a broad but unarticulated way, that the second and/or third defendants may plead defences under the Limitation Act 1969 NSW even though (as has been noted earlier) no defendant has yet filed a defence pleading the Act. 2. The plaintiff's anticipatory pleading is explained by a perceived need on his part to plead that the deceased's estate has suffered loss and damage as a result of the first defendant's alleged failure to recover property from the second and third defendants. The possibility that property otherwise recoverable against the second and third defendants is, by reason of the operation of the Limitation Act, not recoverable provides, by way of "particulars" , a justification for a pleading that the deceased's estate has (already) suffered loss and damage. 3. Perhaps prompted by the anticipatory form of the plaintiff's draft third further amended statement of claim, the first defendant in submissions advanced a Limitation Act defence. 4. The first defendant contends that section 48 of the Limitation Act 1969 NSW operates to extinguish any entitlement to recover from her sums paid out of the deceased's estate earlier than 2 March 2009, six years before a grant of probate was made to her. 5. It is not appropriate to determine the merits of any such defence at this stage of the proceedings because: (a) there is an absence of comprehensive evidence about the circumstances in which payments were made out of the deceased's bank account; (b) the affairs of the deceased were managed by the second defendant pursuant to an enduring power of attorney at the time payments were made and thereafter until the time of the deceased's death; (c) the deceased was, or was arguably, incapable of self- management at all material times; (d) the period during which the deceased was, in fact, incapacitated is neither agreed nor settled beyond doubt by evidence; and (e) if, as the plaintiff contends, the deceased remained under the influence of the second and third defendants from the time disputed payments were made out of his bank account until his death, time might not have commenced to run against recovery action until, by his death, he was released from their influence. 6. The first defendant's Limitation Act case (if not each Limitation Act defence that may be under consideration by the defendants jointly and severally) is based upon assumptions: (a) that a cause of action first accrued to the deceased on each date upon which money was transferred out of his bank account in favour, particularly, of the second and third defendants; and (b) that the six year limitation period for which the Act generally provides (for example, in section 14) in respect of a personal action continued to run from those times without regard to the deceased's incapacity for self-management. 7. There are several problems with this contention, including the following. 8. First, on the case for which the plaintiff contends the deceased was at all material times a person "under a disability" within the meaning of section 11(3)(b)(i) of the Limitation Act. That is because, on the plaintiff's case, he was continuously "incapable of, or substantially impeded in, the management of [his] affairs in relation to [any cause of action in respect of which a limitation question arises] by reason of [a] disease or [an impairment of [his] physical or mental condition". 9. Secondly, upon an assumption that a cause of action first accrued to the deceased upon each date upon which money was transferred out of his bank account, section 52(1)(d) of the Limitation Act provides that the running of the limitation period referable to each cause of action was suspended for the duration of the disability (effectively, until the date of the deceased's death). 10. Thirdly, by operation of section 52(1)(e) of the Limitation Act, the limitation period in such a case may have been extended so as to expire three years after the date of the deceased's death; that is, until 16 May 2017. 11. Fourthly, upon the case for which the plaintiff contends, the deceased was at all material times until the date of his death continuously under the influence of the second and third defendants so that (by analogy with Quek v Beggs (1990) 5 BPR [97 405] at pages 18-19) any cause of action he had against them may not have commenced to run until such time, upon his death, he was freed from their influence. 12. When one takes into account the possibility that the deceased was at all material times before his death a person "under a disability", the first defendant's invocation of the Limitation Act might, arguably, do no more than draw to attention that she took no action to recover money from the second and third defendants before 16 May 2017, when a limitation period referable to section 52(1)(e) of the Limitation Act may have expired. 13. The second and third defendants largely left to the first defendant submissions referable to the Limitation Act but, as I have understood their position, they stand ready to take up any Limitation Act defence that may prove to be available to them. 14. The problem with dealing with any contentions about the Limitation Act at this stage of the proceedings (including any potential scope for the operation of section 23 of the Act) is that there is such a lack of clarity about the underlying factual matrix, and the parties' respective legal contentions based upon that matrix, that it is premature either to offer a definitive ruling on the operation of the Limitation Act or to preclude the plaintiff from pleading a case referrable to it. In the Defendant's Abuse of Process Defence 1. The abuse of process argument was advanced, principally, by the second defendant; but, to the extent that their interests coincided with those of the second defendant, the first and third defendants adopted her submissions. 2. The foundations for characterisation of the plaintiff's derivative suit as an abuse of process lie in the following facts: 1. On 31 October 2008 the deceased executed an enduring power of attorney in favour of the second defendant. 2. On 29 September 2009 the deceased executed an instrument (subsequently found by QCAT to be invalid) purporting to revoke the enduring power of attorney made on 31 October 2008. 3. On 14 December 2009 the deceased executed an instrument (found by QCAT to be invalid) purporting to appoint the plaintiff as his attorney for personal/health and financial matters. 4. On 25 March 2010 QCAT determined that the deceased did not have capacity to revoke the enduring power of attorney dated 31 October 2008; that the instruments executed by the deceased on 29 September 2009 and 14 December 2009 were invalid for a want of capacity on the part of the deceased; that the Adult Guardian be appointed as guardian for the deceased for decisions about accommodation, health care and the provision of services; that the enduring power of attorney dated 31 October 2008 thus be overridden to the extent inconsistent with the appointment of a guardian; and that an application made, by a social worker, for the appointment of the Public Trustee of Queensland as administrator for the deceased be dismissed. 5. During the hearing leading to QCAT's determination, the plaintiff and the third defendant expressed concern about withdrawals from the deceased's bank account in mid-2009, but the second defendant proffered an explanation for those withdrawals, which the Tribunal accepted. It accepted both her explanation and her assurances that she recognised her responsibilities as the deceased's attorney and that she would keep her siblings informed of his financial matters. The Tribunal was satisfied that the deceased's financial matters were complex, that there was now a need for someone to manage these for him, and that the enduring power of attorney for financial matters (which the second defendant held) was operating in the deceased's best interest without any need for the appointment of an administrator. 6. On or about 18 May 2010 the plaintiff and the third defendant filed in QCAT an application for leave to appeal within the Tribunal's structure. 7. On or about the same date they also applied for interim orders which included an order for the appointment of the Queensland Public Trustee as an independent administrator, and an order for the second defendant to file an affidavit accounting for all transactions undertaken by her in her capacity as attorney for the deceased. 8. On 8 July 2010 the plaintiff and the third defendant filed an originating application in the Supreme Court of Queensland seeking, as against the second defendant, orders that she be removed as attorney for the deceased; that the plaintiff be appointed as attorney to replace her; in the alternative, a declaration that the power of attorney granted by the deceased to the second defendant was revoked by the deceased on 29 September 2009; a declaration that the deceased validly appointed the plaintiff as his attorney for financial matters on 14 December 2009; in the alternative, an order that the affairs of the deceased be controlled by the Public Trustee; an order that the second defendant file and serve "a summary of receipts and expenditure under the power of attorney from 31 October 2008 until the date of her removal"; and, further or alternatively, an order that the second defendant file and serve "detailed accounts of dealings and transactions under the power of attorney" 9. On 20 July 2010 Fryberg J dealt with the originating application in the Supreme Court by accepting an interlocutory undertaking from the second defendant; making orders for the conduct of an independent audit of the financial and taxation affairs of the deceased, at the expense of the plaintiff and the third defendant; and making an order that "[the] substantive matters that are the subject of these proceedings now be transferred to QCAT and heard as part of the appeal listed before QCAT on 4 August 2010, in accordance with section 242 of the Guardianship and Administration Act 2000 (Qld)". 10. On 24 September 2010 QCAT (presided over by its President, Wilson J, and a senior member) determined the proceedings described by Fryberg J as "the appeal listed before QCAT on 4 August 2010". The Tribunal dismissed the plaintiff's and third defendant's application for a stay of the QCAT orders of 25 March 2010; dismissed their application for interim orders; refused their application for leave to appeal against the orders of 25 March 2010; and directed that "the audit report referred to in the order of Fryberg J made on 20 July 2010… be provided to [QCAT]". 11. In its reasons for this decision QCAT made observations to the following effect: "The criticism of [the second defendant's] past conduct has…, it should be observed, been ventilated elsewhere and… should not lead to her removal [as the deceased's attorney]. The detailed allegations made against her in submissions are accompanied by an assertion that the Tribunal failed to adequately look into the detail of her administration to date. That is… belied by the careful explanation set out in [the Tribunal's earlier reasons]. We are not persuaded there was any evidential basis by which it can be argued that the Tribunal should have found that [the second defendant] had mishandled, or would mis-manage, [the deceased's] affairs. In practical terms, [the plaintiff and the third defendant] now have the comfort provided by the order of Fryberg J [for the conduct of an audit]" 12. The independent audit contemplated by Fryberg J was not undertaken because the plaintiff and the third defendant did not provide funding for it. 1. The defendants contend that Fryberg J's transfer order of 20 July 2010 had such effect that QCAT's determination of the transferred proceedings on 24 September 2010 should be regarded by this Court as "an earlier judicial decision". 2. I do not accept this. It is not suggested that the fact that QCAT was constituted by a panel that included a judge has a bearing on this contention. The point concerns, rather, the nature of the proceedings the subject of a transfer order. 3. Although Fryberg J (not inappropriately) referred to section 242 of the Guardianship and Administration Act 2000 Qld in his order, the power to make the order appears to have resided not in section 242 but in section 241 of the Act. Section 241 empowered the Supreme Court of Queensland, if it considered it appropriate, to "transfer a proceeding within the Tribunal's jurisdiction to the Tribunal". The gravamen of section 242 was that, if there were parallel proceedings in both the Supreme Court and QCAT, the Tribunal was required to "stay the Tribunal proceedings unless the Court [transferred], the Supreme Court proceedings to the Tribunal". The effect of Fryberg J's order was to relieve QCAT of an obligation to stay the proceedings before it. His order was of a type contemplated by section 242, but the power to make the order either resided in section 241 or, if found in section 242, took its colour from section 241. 4. His Honour's transfer order did not change the character of QCAT's decision-making functions or the character of its decision. In substance, as well as in form, QCAT's determination was a determination of the Tribunal, not a determination of the Queensland Supreme Court or some hybrid of the two institutions. 5. I find no fault in the approach taken by QCAT to the proceedings determined by it. I do not, however, accept that those proceedings bore a character which compels, or justifies, a characterisation of the current proceedings (a derivative suit on behalf of the deceased estate of an incapacitated person) as an abuse of the processes of the Court. 6. In the abstract, I accept that, in an appropriate case, the principles governing an abuse of process (generally discussed by reference to Williams v Spautz (1992) 174 CLR 509 at 518 et seq, and Walton v Gardiner (1993) 177 CLR 378, and commonly by reference to Reichel v Magrath (1889) 14 App Cas 655, or cases applying one or more of those authorities) may be applied to prevent "re-litigation" in this Court of a question the subject of an earlier determination in protective proceedings, whether that determination be by a court or a tribunal entrusted with protective jurisdiction. 7. However, the Court should be slow to characterise as an abuse of the processes of the Court proceedings instituted on behalf of an incapacitated person after his or her death to recover property which, during his or her lifetime, was diverted from his or her estate by a person or persons involved in protective management of his or her person or estate. 8. Decision making in protective proceedings may, if not, generally, bear a different character from that borne by civil proceedings for the recovery of property. Too ready a preparedness to characterise recovery proceedings as an abuse of process, based upon a determination of earlier protective proceedings, might be a cause of injustice to an incapacitated person or to any person entitled to a claim through the incapacitated person, and it might serve as a licence to those involved in management of an incapable person's affairs to assume that, if they survive the relative informality of protective proceedings, they will have acquired an immunity from a liability to account for misdeeds committed in the course of their purported performance of fiduciary obligations. 9. Turning from the abstract to the facts of this case note, first, that the deceased was the subject of both sets of proceedings (at first instance and on appeal) in NCAT and the proceedings in the Supreme Court of Queensland. He was not named as a party to the proceedings. Nor was he separately represented in them. 10. Importance attaches to recognition of the character of the proceedings in QCAT and the Queensland Supreme Court. Those proceedings have their NSW equivalents in the NSW Civil and Administrative Tribunal (NCAT) and this Court, although there are differences in procedure and terminology. 11. In essence, QCAT determined that, although the deceased lacked capacity for self-management and he required some form of protective management, it was in his best interests to allow the second defendant to continue managing his affairs as an enduring attorney, subject to the appointment of a public guardian to deal with problems affecting his person as distinct from his property. In so deciding, it determined that there was no need for the appointment of a protected estate manager (an "administrator") to administer his property. 12. The Queensland proceedings, in all forms, involved an exercise of protective jurisdiction. They were essentially administrative in character, although the plaintiff and his sisters approached them with adversarial zeal. The proceedings were designed to protect the deceased going forward. Although they looked to the past in aid of decision-making about future risks in management of the deceased's affairs, they were not designed to delve deeply into the existence or otherwise of disputed claims about past property transactions. They were an exercise in risk management, necessarily summary in character. 13. The refusal or failure of the plaintiff and the third defendant to fund an independent audit as contemplated by Fryberg J cannot be attributed to the deceased. They had no authority to represent the deceased. He was, in any event, incapacitated. If they were at fault (in not, from their own resources, funding an audit ostensibly to protect his interests), no fault on their part can be ascribed to him. 14. The Queensland proceedings were not proceedings in which it was open to the deceased (who was neither a party to the proceedings, nor separately represented in them) to assert entitlements in equity against family members who, purportedly in his interests, fought over him and rights to manage his person and estate. 15. They were proceedings which, essentially, were interlocutory in character because concerned with ongoing management of the person and estate of an incapable person: Cf, Mao v AMP Superannuation Ltd [2018] NSWCA 72 at [22]-[24]. 16. They were proceedings wholly different from the current proceedings, in which the plaintiff seeks (on behalf of the deceased's estate) to assert entitlements to equitable relief in adversarial proceedings. An important distinction between protective and equity proceedings is that whereas "[equity] practice is directed to litigation", the "practice [of the protective jurisdiction] should be [and generally is] directed to administration without strife in the simplest and least expensive way": H S Theobald, The Law Relating to Lunacy (Stevens and Sons, London, 1924), page 382. 17. I am not satisfied that the fact or nature of the earlier proceedings in the Queensland Supreme Court or QCAT (in which competing claims by others, including his children, to manage the affairs of the deceased as an incapable person were litigated) are such as to warrant a finding that the conduct of a derivative suit (by the plaintiff on behalf of the estate of the deceased), designed to hold the defendants to account for their dealings with the deceased during his lifetime, are an abuse of the processes of the Court. CONCLUSION 1. For the reasons set forth in this judgment, I conclude as follows. 2. First, the advancement by the plaintiff of a derivative suit (to recover on behalf of the estate of the deceased property transferred to the defendants during the lifetime of the deceased) is not an abuse of the processes of the Court by reason only of the earlier proceedings in the Supreme Court of Queensland and QCAT concerning the protection of the person and property of the deceased during his lifetime. 3. Secondly, in the absence of agreement as to: (a) whether, when and in what circumstances the deceased was incapable of managing his affairs or otherwise incapacitated; and (b) the circumstances in which property was transferred out of the bank account of the deceased to the defendants during his lifetime, any determination about the operation of the Limitation Act 1969 NSW, vis a vis claims for relief made, or proposed to be made, on behalf of the estate of the deceased against the defendants is premature. 4. Thirdly, the plaintiff should not be permitted, without the leave of the Court or the consent of the defendants, to include in these proceedings claims for relief against the first defendant in devastavit in the form of: 1. a claim in tort, unless the plaintiff pleads and particularises with precision loss and damage (caused by conduct of the first defendant) to the estate of the deceased. 2. a claim in equity, unless the plaintiff pleads and particularises a claim based upon a breach of fiduciary obligations owed to the estate of the deceased by the first defendant. 1. Fourthly, if the plaintiff contends that a cause of action against the first defendant in devastavit accrued after the commencement of these proceedings, it is open to him (at his own risk as to costs) to commence fresh proceedings against the first defendant and, if and as so advised, to apply for an order that those proceedings be heard together with these proceedings. 2. Fifthly, given that: (a) the plaintiff is a beneficiary of the estate of the deceased; (b) he seeks to recover property from the defendants on behalf of the estate of the deceased; (c) the first defendant, in her capacity as executrix of the estate of the deceased, has declined to assert on behalf of his estate the claims sought to be advanced by the plaintiff; (c) one of the persons from whom the plaintiff seeks to recover property on behalf of the estate of the deceased is the first defendant in her personal capacity; and (e) all affected persons have been joined in the proceedings, an order should be made, subject to further order, that the plaintiff (at his own risk as to costs) be appointed, pursuant to rule 7.10 of the Uniform Civil Procedure Rules 2005 NSW, to represent the estate of the deceased in these proceedings. 3. Sixthly, given that such an order is to be made, entitling the plaintiff to represent the estate of the deceased for the purpose of these proceedings, the plaintiff should not be permitted, pending the determination of his derivative suit against the defendants, to apply for revocation of the grant of probate made to the first defendant on 2 March 2015 without the leave of the Court. 4. Seventhly, leave should nevertheless be reserved to the plaintiff (at his own risk as to costs) to apply to the Court for the appointment of a receiver and manager of the estate of the deceased on the ground that assets of the estate are at risk, if that be the fact. 5. Eighthly, the claims for relief asserted by the plaintiff by way of a derivative suit on behalf of the estate of the deceased against the first defendant (in respect of $50,000 paid to her out of the bank account of the deceased) and against the second and third defendants (in respect of sums paid to them respectively out of the bank account of the deceased) are open to be made, subject to such (if any) defences as may be pleaded by reference to the Limitation Act 1969 NSW. 6. Ninthly, management of the proceedings would best be advanced by the plaintiff's current pleading (the "second further amended statement of claim" filed on 18 December 2017) being struck out, with leave reserved to the plaintiff to re-plead in a form (not identical with the draft "third further amended statement of claim" advanced on the plaintiff's motion) consistent with these reasons for judgment, and with the benefit of an order that, for the purpose of the proceedings, he represent the estate of the deceased. 7. Tenthly, subject to orders being made to that effect, each of the notices of motion presently before the Court should otherwise be dismissed. 8. Eleventhly, approaching the question of costs broadly on the basis that the costs of each motion should follow the event but that the plaintiff should pay the costs of his application for leave to amend his pleading (an indulgence) and costs thrown away by his amendments (wasted costs), prima facie costs orders to the following effect should be made: 1. The plaintiff should pay the defendants' costs of his motion, together with any costs thrown away by each amendment of the statement of claim. 2. The plaintiff should pay the first defendant's costs of the first defendant's motion. 3. The second defendant should pay the plaintiff's costs of her motion. 4. The third defendant should pay the plaintiff's costs of her motion. 5. Each party should otherwise pay or bear his or her own costs of each motion. PROPOSED ORDERS 1. Subject to allowing the parties an opportunity to be heard as to the form of the orders to be made, I propose to make the following orders: 1. ORDER that the second further amended statement of claim (filed on 18 December 2017) be struck out. 2. ORDER, subject to the conditions for which order 3 provides and further order, that the plaintiff be appointed (pursuant to rule 7.10 of the Uniform Civil Procedure Rules 2005 NSW and at his own risk as to costs) to represent the estate of the late Egidio Nitopi in these proceedings. 3. ORDER that the plaintiff be granted leave to file a third further amended statement of claim on condition that: 1. he is not, without the leave of the Court, to apply, during the pendency of these proceedings, for an order that the grant of probate made to the first defendant on 2 March 2015 be revoked. 2. notwithstanding (a), he is at liberty to apply (at his own risk as to costs) for the appointment of a receiver and manager to the estate of the deceased should he be so advised. 3. he is not, without the leave of the Court or the consent of the defendants, to plead in these proceedings a claim in devastavit against the first defendant. 4. notwithstanding (c), he is at liberty (at his own risk as to costs) to commence fresh proceedings advancing a claim in devastavit on behalf of the estate of the deceased (subject to obtaining a representative order from the Court), and to apply for an order that those proceedings be heard together with these proceedings. 1. ORDER that any statement of claim filed pursuant to Order 3 be filed and served within 28 days of the date of these orders being made. 2. ORDER that the plaintiff pay the defendants' costs of his notice of motion filed on 16 April 2018, together with any costs thrown away by his amendments of the statement of claim. 3. ORDER that the plaintiff pay the first defendant's costs of the first defendant's notice of motion filed 27 November 2017. 4. ORDER that the second defendant pay the plaintiff's costs of her notice of motion filed on 25 January 2018. 5. ORDER that the third defendant pay the plaintiff's costs of her notice of motion filed on 29 January 2018. 6. ORDER that each party otherwise pay or bear his or her own costs of those notices of motion. 1. I propose, also, to give consequential directions for the filing of pleadings beyond a third further amended statement of claim, culminating in an order that the proceedings be listed before the Registrar for further directions . ********** Amendments 06 November 2018 - Coversheet p. 3 Second Defendant's Solicitors. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 November 2018