Bird v Bird

[2013] NSWCA 262

NSW Court of Appeal

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Interrogate

Catchwords

1. Succession
2. › Executors and administrators
3. › Duties of executors
4. › Duty to call in and collect assets of deceased
5. › Devastavit
6. › Liability for failing to discover and recover misappropriated estate assets
7. › Manner of determining loss suffered by estate
1. Equity
2. › Trusts and trustees
3. › Third party liability for breach of trust
4. › Knowing receipt
5. › First limb of Barnes v Addy
6. › Actual knowledge required
7. › Whether recipients knew attorney lacked power to pay proceeds into own account
8. › Whether failure to cross-examine on specific knowledge fatal to claim
1. Limitation of Actions
2. › Accrual of cause of action
3. › Devastavit claim against executors
4. › Whether time ran from first failure to recoup loss or from expiry of limitation period for executors' claim against wrongdoer
5. › Contingent loss not causing limitation period to commence
6. › Limitation Act 1969 (NSW), s 14
1. Equity
2. › Trusts and trustees
3. › Tracing
4. › Mixed funds
5. › Presumption that trustee draws on own funds first
6. › Re Hallett's Estate applied

Quick Take

Where executors fail to discover and pursue a claim against a person who has misappropriated estate assets, the limitation period for a devastavit claim based on that failure does not begin to run until the executors' potential claim against the wrongdoer becomes statute-barred, because any loss from earlier failures to recoup (such as failing to withhold a legacy) is at best contingent. The Re Hallett's Estate presumption that a trustee draws on own funds first applies when determining what portion of expenditure from a mixed account came from trust funds versus the trustee's own funds.