Australian Executor Trustees Limited v Lokit Investments Pty Ltd

Australian Executor Trustees Limited (AET) as trustee of the YM Trust brought an action against Lokit Investments Pty Ltd (Lokit) seeking a declaration that AET is not liable to pay on demand the Third Lokit Loan. The court was tasked with determining whether the loan was statute-barred under the Limitation of Actions Act 1958 (Vic) and whether Anshun estoppel applied, preventing AET from contesting the loan's validity. Additionally, the court considered whether AET's vesting of the trust was proper under the Supreme Court (General Civil Procedure) Rules 2015 (Vic).

The central legal issues before the court were whether the loan was statute-barred under ss 24(3) and 25 of the Limitation of Actions Act 1958 (Vic) and whether Anshun estoppel precluded AET from contesting the loan's validity. The court had to scrutinise the nature of any acknowledgment that might have tolled the limitation period and the circumstances under which Anshun estoppel might apply. Furthermore, the court assessed whether AET's decision to vest the trust complied with the trust deed and was in the best interest of the beneficiaries.

The court found that the loan was indeed statute-barred under the Limitation of Actions Act 1958 (Vic) because there was no evidence of an acknowledgment that would have tolled the limitation period. The court emphasised that Anshun estoppel was only established in the clearest of cases and required a scrupulous examination of all circumstances. Given the potential for conflicting judgments, the court determined that Anshun estoppel did not apply. Additionally, the court held that AET's vesting of the trust was proper as the trust deed provided the power to vest without consent and the trust no longer served its commercial purpose. The court found that AET had not acted improperly in providing the advice that led to the vesting.

The court declared that AET as trustee of the YM Trust was not liable to pay on demand the Third Lokit Loan.