Twigg v Twigg

The case of *Twigg v Twigg* concerned a dispute where the director of a corporate trustee allegedly caused trust funds to be distributed to himself. The central questions before the Court of Appeal of Victoria were whether written resolutions authorising these distributions were validly adopted by the relevant date, whether the director had been delegated the authority to make distributions unilaterally, and whether the trust monies were held on a constructive trust.

The court was required to determine several legal issues, including whether the director was liable for breach of trust as a trustee de son tort, and if so, whether the director had acted "dishonestly" for the purposes of postponing any applicable statutory limitation period or its equitable equivalent. Further issues involved the application of the defence of laches, the traceability of property purchased with the proceeds of trust assets, and the applicability of the *Limitation of Actions Act 1958* (Vic) to claims for breach of fiduciary duty and proprietary relief.

The court reasoned that acting as a director of a corporate trustee, even without proper authority and in breach of fiduciary duties, did not alone constitute an assumption of the trust for the purpose of making the director liable as a trustee de son tort. However, the court found that the director's conduct involved dishonesty, not in the sense of a lack of honest belief in entitlement, but in the form of conscious wrongdoing and active concealment of information from the other director, which prevented the postponement of limitation periods. The court also found that property effectively purchased by the director, even if through an alter ego, was traceable, along with its proceeds. While section 21(2) of the *Limitation of Actions Act 1958* (Vic) was held not to apply to remedial constructive trusts, claims for proprietary relief and equitable compensation were determined to be within the analogy of section 5 of the Act, attracting an equivalent equitable limitation period.

The Court of Appeal dismissed the motion for leave to amend the notice of appeal and dismissed the appeal itself. However, it allowed the cross-appeal in part, ordering that the appellants pay the respondents’ costs of the appeal and cross-appeal, and directed that short minutes be brought in to give effect to the judgment, including any additional relief arising from the cross-appeal.