Supreme Court
New South Wales
- Amendment notes
Medium Neutral Citation: Lowe v Pascoe (No 9) [2021] NSWSC 163 Hearing dates: 10, 11, 12, 13, 14, 18, 19 August 2020 Date of orders: 4 March 2021 Decision date: 04 March 2021 Jurisdiction: Equity Before: Emmett AJA Decision: Order that:
1. The First Defendant in proceedings 2005/262284 and 2017/325815 bring in Short Minutes of Order reflecting the conclusions in these reasons.
2. The First Defendant serve the Short Minutes of Order to all other parties to proceedings 2005/262284 and 2017/325815 within 14 days of the publication of these reasons.
3. Any party to proceedings 2005/262284 and 2017/325815 who objects to the orders proposed by the First Defendant, within 14 days of receipt of the Short Minutes of Order, specify in writing the nature of the objection and the reasons for the objection.
4. Proceedings 2005/262284 and 2017/325815 be listed for directions on 15 April 2021 in order to resolve any dispute as to the orders and to make final orders.
5. Leave to apply is reserved to the parties to proceedings 2005/262284 and 2017/325815 if there are difficulties in working out notional reimbursements and distributions.
Catchwords: ESTOPPEL — Anshun estoppel — decisions to which applicable — two proceedings — submitting appearance entered in earlier claim — submitting appearance invited by beneficiaries of earlier proceeding — whether failure to complain rendered subsequent proceedings an abuse of process
ESTOPPEL — res judicata — issue estoppel — earlier proceeding concerning errant fiduciary — numerous judgments and findings — fiduciary misappropriated partnership monies — earlier proceeding did not result in grant of relief to claimant in new proceeding — findings about knowledge misappropriations relevant — ambit of matters estopped from being denied in new proceedings
EQUITY — defences — laches and acquiescence — Knowledge of ability to bring claim — circumstances rendering delay unconscionable for account of profits
EQUITY — defences — statutes of limitation — application by analogy — whether analogous application unconscionable in the circumstances
RESTITUTION — restitution for wrongdoing — equity — constructive trust — account of profits — allowances for errant fiduciary’s efforts — calculation of accounts with mathematical exactitude impossible — nature of benefit obtained by occupation of premises acquired with misappropriated funds — adjustments where beneficiaries received estate distributions comprising misappropriated funds
Legislation Cited: Limitation Act 1969 (NSW), s 15, 47
Probate and Administration Act 1898 (NSW), s 61
Real Property Act 1900 (NSW), s 42
Cases Cited: Bahr v Nicolay (No 2) (1988) 164 CLR 604; [1988] HCA 16
Black v S Freedman & Co (1910) 12 CLR 105; [1910] HCA 58
Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26
Dart Industries Inc v Decor Corporation Pty Ltd (1992) 179 CLR 101; [1993] HCA 54
Erlanger v New Sombrero Phosphate Company (1878) 3 App Cas 1218
Farah Construction Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22
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- AGLC
- Lowe v Pascoe (No 9) [2021] NSWSC 163
- Case
- [2021] NSWSC 163
- Decision Date
CaseChat Overview and Summary
The court considered that the principles of Anshun estoppel applied, as the submitting appearance in the earlier proceeding was effectively invited by the beneficiaries of that proceeding. The court held that the failure to object to the administrator's appearance in the earlier proceeding rendered the subsequent proceedings an abuse of process. Regarding res judicata and issue estoppel, the court found that the earlier proceeding concerning the errant fiduciary did not result in a grant of relief to the claimant in the new proceeding. However, the findings about the fiduciary's knowledge and misappropriations were relevant, and the ambit of matters estopped from being denied in the new proceedings was established. The court also held that laches and acquiescence did not apply in the circumstances, and the application of limitation periods by analogy was unconscionable.
The final orders included declarations regarding the partnership, the acquisition of properties, the fiduciary breach by KST, and the holding of net proceeds on constructive trust for the partnership. The court further ordered that the administrator be indemnified for administration and trust costs, and that Sunly, as the administrator of the estate of FC Chow, was estopped from making any claim to an entitlement to any part of the funds held by the administrator that had been deployed to meet the payments referred to above.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The Administrator will properly incur further costs in his capacity as administrator of the estate of KST and as trustee of the Net Proceeds Trust and the Profits Trust (Future Administration and Trust Costs) including the costs of the Inquiry. With the knowledge of Sunly and Stella, the Administrator has paid the amounts ordered to be paid by the Court by utilising the funds held by him in his capacity as administrator of the estate of the late KST. No objection was taken by Sunly or Stella to the Administrator effecting payments referred to above. In reliance upon the matters alleged above, the Administrator has made payments and acted and continues to act as administrator of the estate of KST and trustee of the Net Proceeds Trust and the Profits Trust to progress the Inquiry. In the circumstances, Sunly, as administrator of the estate of FC Chow, is estopped from making any claim to an entitlement to any part of the funds held by the Administrator in his capacity as administrator of the estate of the late KST that has been deployed to meet the payments referred to above. From 26 March 2001, the Administrator has been the trustee of the Net Proceeds Trust and the Profits Trust. As trustee of the Net Proceeds Trust and the Profits Trust, the Administrator is entitled to be indemnified out of the assets that are the subject of those trusts. Pursuant to the indemnity referred to above, the Administrator has made the payments referred to above. Pursuant to the indemnity referred to above, the Administrator is entitled to pay such part of the future administration costs as are attributable to his remuneration, costs and expenses incurred properly in his capacity as trustee of the Net Proceeds Trust and the Profits Trust, out of the respective assets that are the subject of those trusts. I do not understand there to be any dispute on the part of Sunly, as administrator of the estate of FC Chow, as to the Administrator’s entitlement to be reimbursed for the Administration and Trust Costs and expenses and the Future Administration and Trust Costs. A declaration that Geoffrey, Mary, Margaret, Helen, Janet, KST and FC Chow were partners as from 1 August 1975 and operated the businesses of Wing Yuen Tai and Yee Sing Butchery pursuant to the Partnership in the following shares: Geoffrey as to a 10 per cent share; Mary as to a 10 per cent share; Margaret as to a 10 per cent share; Helen as to a 10 per cent share; Janet as to a 10 per cent share; KST as to a 20 per cent share; and FC Chow as to a 30 per cent share. A declaration that each of the Partnership Properties was acquired by KST using his own funds as to 10% and funds of the Partnership as to 90%. A declaration that by utilising partnership funds to purchase each of the Partnership Properties, KST breached the fiduciary duties he owed to the members of the Partnership, including Mary and Geoffrey. A declaration that:a. In respect of the Haig Street Property, 90% of the net proceeds of the sale of the one-third interest held by KST is held on constructive trust for the Partnership.b. In respect of the Maroubra Road Property, 90% of the net proceeds of the sale of the four-fifth interest held by KST is held on constructive trust for the Partnership.c. In respect of the Campbelltown Property, 90% of the net proceeds of the sale of the six-tenth interest held by KST is held on constructive trust for the Partnership.