Beware of limitation periods for estate debts

Insurance House of Australia Pty Ltd v Dalton [2017] QDC 106


The defendants brought an application for summary judgement for the plaintiff’s claim for a debt against the deceased estate. Relevantly, plaintiff did not issue proceedings until November 2016, more than nine years after the debt arose.

The amounts allegedly owed to the plaintiff were:

[4] … $800,000 from the Westpac Banking Corporation. $200,000 thereof was used for the purposes of the business. $600,000 was used to payout Mr Dalton. The Deceased and Mr Armstrong each borrowed this money from the plaintiff to use for the purposes of repaying Mr Dalton. The Deceased apparently did not repay that amount to either the plaintiff or the bank, and this forms the largest part of the debts allegedly owed. The Deceased’s share of $300,000 came about by the Deceased assuming that debt which was allocated to her loan account with the plaintiff company.

[5] The other amounts are as follows:

(a) an amount of $23,748.16, said to represent a debt owed to the plaintiff from February 2007;

(b) a further debt of $17,149.55 also said to be owing from that time;

(c) an amount of $21,000, said to have been removed improperly by the Deceased from the plaintiff’s bank account; and 3

(d) an amount of $62,000, said to represent excessive rent paid to the Deceased, as trustee of a trust, in respect of premises rented to the plaintiff.


Section 10 of the Limitations of Actions Act 1974 (Qld) (the “Act”) relevantly provides:

(1) The following actions shall not be brought after the expiration of 6 years from the date on which the cause of action arose—

(a) subject to section 10AA, an action founded on simple contract or quasi-contract or on tort where the damages claimed by the plaintiff do not consist of or include damages in respect of personal injury to any person;

Further, section 29 of the Act provides for the extension of the limitation period where a person is under a disability.


The defendants sought to rely on s 10(1)(a) of the Act as a defence to the plaintiff’s claim. Discussing whether the plaintiff could rely on s 29 of the Act, Kent QC DCJ stated:

[10] … the plaintiff pleaded that the Deceased was suffering from a significant illness (“Pick’s Disease”) from at least 23 December 2009 and therefore, in effect, the limitation period was suspended during the illness, presumably a reference to s 29 of the Limitation of Actions Act.

[11] However, as the applicant points out, the suspension provided for in s 29 of the Act for a person who was under a relevant disability only operates in favour of the person suffering the disability, not her opponent. That is, there was in this case no “right of action” accruing to the Deceased as set out in s 29; it accrued to the plaintiff company. Further, the section contemplates the person being under a disability at the time of accrual of the right of action. That did not occur here; the Deceased apparently first suffered from the disease after January 2009. Thus, this argument was not persisted with by the respondent plaintiff at the hearing of the application.

Accrual of cause of action – date of demand or date of monies advanced?

The plaintiff submitted that the cause of action arose on the date when a demand was made for the money in 2015. In contrast, the defendant submitted that the cause of action arose when the sums of money were advanced. Discussing this, his Honour stated:

[13] … the applicant submits that, in respect of these various amounts, the cause of action for monies said to be repayable on demand arises from the date the money is advanced and not from the date of a later demand. Reference is made to Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 566-567. The court observed:

“A loan of money payable on request creates an immediate debt… the debt in which constitutes the cause of action arises instantly on the loan. Where money is lent, simply, it is not denied that the statute begins to run from the time of lending” (referring to Norton v Ellam (1837) 2 M. & W., at p 464).

This was because the nature of an action for debt (indebitatus assumpsit) involved an action for a promise to pay on demand. If the promise were for a collateral thing, it might not create a debt until demand (an example is a guarantee). However, in an action for debt, the defences would seem to be limited to denying the existence of a debt at any one time, or alternatively, pleading the way in which the debt had been discharged.


As to whether the plaintiff could rely on s 38(1)(a) of the Act which postpones the commencement of the limitation period until the plaintiff discovers the fraud, Kent QC DCJ stated:

[16] … the action must be based on the fraud of the defendant or her agent. This would normally involve a claim such as fraudulent conversion, involving deliberate dishonesty. In this case the claim is for debt, as discussed above; it does not involve an element of fraud. The terminology in 2 [2013] QSC 79, [28]-[32]. Plaintiff’s outline of argument, paragraph 32. 5 paragraph 8(c) of the statement of claim is amounts “misappropriated” and “incorrectly noted” in the books. No dishonesty is explicitly mentioned. In paragraph 8(d) there is reference to excessive rents, but again no dishonesty is pleaded. Again, this is in the context of a claim for a debt. One of the causes of action alleging fraudulent conduct could have been chosen and was not.

His Honour found that s 10(1)(a) of the Act was made out and judgement was entered for the defendants.

David Cormack – Brisbane Barrister & Mediator


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