Plaintiff v First Defendant

1 The application the subject of these reasons is for summary judgment on part only of the plaintiff's claim. It is something of an unusual summary judgment application in that the facts relied upon by the plaintiff are all admitted by the defendants in their pleading. As I set out further below, these admissions remove the necessity for the plaintiff to prove by evidence the facts on which he (initially she as I explain below) relies in this application. Further, the plaintiff accepts (for the purposes of this application only) the authenticity of a document entitled Family Agreement, which is exhibited in the evidence in answer of the first defendant and on which the defendants rely to assert that they have a defence with real prospects of success. Nor does the plaintiff take exception on this application to the fact that the Family Agreement is not pleaded by the defendants in answer to the allegations on which the plaintiff seeks summary judgment. In other words, the plaintiff accepts that it is sufficient that the Family Agreement is asserted to be the defendants' defence in the affidavit of the first defendant.

2 For the reasons that I now give I have concluded that the defendants have no real prospect of success in their proposed defence by way of reliance on the Family Agreement to the part of the claim on which summary judgment is sought. However, whether the Court should nevertheless exercise the discretion against the grant of summary judgment, and, if summary judgment should be given, the appropriate form of relief remain live issues, on which I will hear the parties further.

3 This proceeding commenced in February 2017. The plaintiff at that time was Despina Lambrou (Mrs Lambrou) who sued by her administrator, State Trustees Limited. Mrs Lambrou was then aged 81 years, living in an aged care facility and suffering from dementia. The firstnamed defendant is the older of her two sons, who was then aged approximately 58 years. The secondnamed defendant is his wife. In this judgment I will call the family members other than Mrs Lambrou by their first names, without intending any disrespect.

4 Mrs Lambrou had one other child, a younger son called Christos, who was aged in the order of 49 years at the time the proceeding commenced. As I will set out below, he is now the plaintiff as the representative of the estate of Mrs Lambrou, who has died since the commencement of the proceeding.

5 Mrs Lambrou purported to appoint the first defendant, her older son Emmanuel, her attorney in March 2009 and on 5 January 2015 he was appointed her guardian and administrator by the Victorian Civil and Administrative Tribunal (VCAT). On 14 October 2016, VCAT revoked the power of attorney and the administration order and appointed State Trustees Limited as Mrs Lambrou's administrator.

6 The amended statement of claim dated 18 May 2017 (ASOC) seeks relief in relation to dealings by the defendants with land formerly owned by Mrs Lambrou at 3 Lee Street, Flemington, and withdrawals from the account into which her pension was paid (Pension Account). The land at 3 Lee St was subdivided in early 2013 into two lots. Mrs Lambrou remaining living in her home on Lot 1 and transferred the rear lot, Lot 2, to the defendants without valuable consideration. They subsequently built a home on that lot.

7 Mrs Lambrou was admitted to aged care in May 2015 and shortly thereafter the first defendant sold Lot 1 as her administrator for $1,321,000. From the net proceeds he withdrew the sum of $844,408 of which he admits using $552,000 for his own purposes.

8 By their Amended Defence to the Amended Statement of Claim dated 20 July 2017 (Amended Defence), the defendants allege that the transfer of Lot 2 to them was a gift and they resist the claims made in relation to the proceeds of sale of Lot 1 and withdrawal of funds by the first defendant from the Pension Account.

9 State Trustees Limited for Mrs Lambrou sought summary judgment in respect of the whole of her claim by summons filed 9 June 2017. I heard the application on 14 September 2017. At the hearing, the then plaintiff limited the application for summary judgment to part only of her claim, being the sum of $552,000 from the proceeds of sale of Lot 1.

10 Sadly, Mrs Lambrou died on 2 November 2017. As a consequence, the administration order in favour of State Trustees Limited came to an end. The younger son, Christos, indicated an intention to apply to be appointed to represent Mrs Lambrou's estate for the purpose of receiving this judgment and taking over the proceeding. The defendants did not initially consent to that proposal and accordingly a summons was filed by Christos on 13 February 2018 making that application. The defendants subsequently consented and on 27 February 2018 I ordered by consent that Christos Lambrou be appointed to represent the estate of Despina Lambrou, deceased.

Plaintiff's allegations in respect of which summary judgment is sought

11 The ASOC alleges that the first defendant misappropriated funds from the Pension Account and breached fiduciary obligations he owed his mother as her attorney and later administrator by reason of the subdivision of the land formerly known as 3 Lee St, Flemington; transfer by Mrs Lambrou of Lot 2 of that land to him and his wife for no valuable consideration; and misappropriation for his own purposes of some of the proceeds of sale of Lot 1 after his mother's admission to aged care. Relief is sought against the second defendant as well as the first defendant in respect of this conduct by reason of her knowledge of the circumstances and receipt of substantial benefit. The allegations are also framed in terms of unconscionable conduct by both defendants having regard to their knowledge of Mrs Lambrou's special disabilities.

12 Paragraphs 31, 33 and 34 of the ASOC identify the factors said to have created a fiduciary relationship and Mrs Lambrou's special disabilities to the knowledge of the defendants. These factors include Mrs Lambrou's age, her limited English, her trust and reliance on the first defendant, the relationship of mother and son, the grant of the purported power of attorney, Mrs Lambrou's increasingly poor health, in particular her cognitive decline, to the knowledge of the defendants, and her admission to aged care. While some of these factors are admitted by the defendants, critically they assert that Mrs Lambrou did not show symptoms of cognitive decline caused by Alzheimer's disease until about August - October 2014, which was after the subdivision and the transfer to them of Lot 2. They assert that it was Mrs Lambrou's wish to subdivide the land and to give them Lot 2, for a number of reasons.[1]

13 It is important to note from the outset that the plaintiff no longer seeks summary judgment on the allegations that the subdivision of the land formerly known as 3 Lee St, Flemington and transfer of Lot 2 of that land by Mrs Lambrou to the defendants was effected by the first defendant in breach of fiduciary and other duties he owed to his mother, or by reason of the defendants taking advantage of her special disabilities.

14 Nor does the plaintiff in this application seek summary judgment on the allegations that the first defendant misappropriated funds from the Pension Account to use for his own purposes, and for the collective benefit of himself, the second defendant and their children.

15 On this application, the plaintiff seeks summary judgment solely on the allegation that the $552,000 of the proceeds of sale of Lot 1 that the first defendant admits he used for his own purposes was so utilised in breach of the fiduciary obligation he owed his mother by virtue of his appointment by VCAT in January 2015 as his mother's administrator. The plaintiff seeks that judgment be entered for that amount, without prejudice to her (now his) right to seek the full proceeds of the sale at trial.

16 The defendants concede that, in the abstract, an appointment as administrator imposes fiduciary obligations on the administrator. Nor do they dispute that the key elements of a fiduciary duty are that the fiduciary must not act so as to occasion a conflict or a significant possibility of conflict between his personal interest and that of the person to whom he owes the duty (conflict rule) and nor must he obtain a personal benefit by reason of his position as fiduciary (profit rule).

17 It is common ground that these proscriptions can be overcome by informed consent. The defendants do not rely on that defence in relation to their use of the proceeds of sale of Lot 1. It could be difficult to do so, given that Mrs Lambrou had been admitted to aged care before the sale, and the defendants concede that she exhibited signs of cognitive decline by August - October 2014, which was the year before the sale.

18 The defendants contend, however, that the scope of Emmanuel's fiduciary duty was limited by a pre-existing agreement between himself and his parents, evidenced by a document headed 'Family Agreement' dated November 2001 (Family Agreement). The Family Agreement purports to be signed by Mrs Lambrou and her late husband George Lambrou and states that Emmanuel 'repaid loans and debts on behalf (sic) to the amount of $887,000 29 February 1980 to 18 December 2001'. The Family Agreement concludes 'We agree that our beloved son Emmanuel is entitled to take back the loans of $880,000 he provided to us when funds become (or became) available in the future'.[2]

19 Emmanuel asserts in his affidavit sworn 21 July 2017 in opposition to the application for summary judgment that he was entitled to use at least $552,000 of the proceeds of sale of Lot 1 for his own benefit by virtue of the Family Agreement, because his entitlement under the Family Agreement extended to $880,000. He deposes:

I believe that I was entitled to so use the sum of $552,000 and that I acted pursuant to claim of right. The plaintiff and I had often over the years discussed how the debt which the plaintiff admitted owing me would be repaid. For fourteen years I waited. An opportunity to obtain partial recoupment of the debt arose when the plaintiff became entitled to the proceeds of sale of the 3 Lee St house in August 2015.[3]

20 The plaintiff seeks summary judgment pursuant to ss 61 and 63 of the Civil Procedure Act 2010 (Vic) (CPA). Those sections provide as follows:

61 Plaintiff may apply for summary judgment in proceeding

A plaintiff in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a defendant's defence or part of that defence has no real prospect of success.

63 Summary judgment if no real prospect of success

(1) Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.

(2) A court may give summary judgment in any civil proceeding under subsection (1) -

(a) on the application of a plaintiff in a civil proceeding;

(b) on the application of a defendant in a civil proceeding;

(c) on the court's own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding.

21 Provision is made in Order 22 of the Supreme Court (General Civil Procedure) Rules 2015 (Rules) for the making of an application pursuant to s 61 of the CPA. Rule 22.05 provides that a defendant to an application for summary judgment may 'show cause against the application' by affidavit or otherwise. Here, the defendants rely on Emmanuel's evidence of the Family Agreement to show cause, although the Family Agreement is not pleaded by them in their Amended Defence in response to the allegations concerning the sale proceeds of Lot 1.

22 The Court of Appeal considered the 'no real prospect of success' test imposed by s 63 of the CPA in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[4] particularly in contradistinction to the earlier test that applied to applications for summary judgment. The majority of the Court, Warren CJ and Nettle JA (as he then was) held:

1. the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a 'real' as opposed to a 'fanciful' chance of success;
2. the test is to be applied by reference to its own language and without paraphrase or comparison with the 'hopeless' or 'bound to fail test' essayed in General Steel;

1. it should be understood, however, that the test is to some degree a more liberal test than the 'hopeless' or 'bound to fail' test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent's case is not hopeless or bound to fail, it does not have a real prospect of success;

1. at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[5]

23 Accordingly, the first issue on this application is whether the defendants have a real, as opposed to fanciful, prospect of success in contending at trial that the scope of the first defendant's fiduciary obligation as administrator of his mother was curtailed by the Family Agreement to the extent of $552,000 of his mother's funds. Whether the defendants have any real prospect of success in resisting the plaintiff's claim that the first defendant breached his fiduciary obligation to his mother by taking those funds is also in contest in this application, although, as will be seen, that largely falls to be determined by the issue as to scope.

24 The defendants also informed me that they dispute in this application the nature of the remedy that the plaintiff seeks, although neither party made detailed submissions on this point.

25 Before proceeding further, I record that the defendants took two objections to the evidence relied on by the plaintiff in the application. The first objection, made in their written submissions filed in advance of the hearing, was that the first affidavit of Mr Ian Turner,[6] sworn in support of the application, did not state his belief that the defence to the part of the claim in respect of which summary judgment is sought has no real prospect of success, or no real prospect of success except as to the amount of the claim. This requirement is stipulated in r 22.04(1)(b) of the Rules. Mr Turner swore a supplementary affidavit after receipt of the defendants' submissions seeking to correct this error. In that affidavit he swears to his belief that the defence to paragraphs 23-26, 31, 32, and 39(b) of the plaintiff's amended statement of claim has no real prospect of success except as to the amount of the claim. He identifies these paragraphs as being those by which the plaintiff seeks $844,408.25 from the proceeds of sale of Lot 1 of the land formerly known as 3 Lee St, Flemington, which the first defendant admits receiving, and of which he admits using $552,000 for his own purposes.

26 The defendants objected to the admission of this supplementary affidavit. I allowed it for reasons given orally at the hearing, which I summarise here. I accepted that the requirement in the Rules is an important one, and that it is also important that the statement be made in the affidavit which is required by the Rules to be served not more than 14 days prior to the date for hearing named in the summons. However, I considered that in this instance those requirements could and should be dispensed with, as they do not go to the substantive merits of the application and nor had the defendants identified any prejudice, other than the loss of an adversarial advantage and possible application for costs if adjournment was required. The defendants did not seek any adjournment arising from the filing of Mr Turner's supplementary affidavit.

27 The defendants also took objection to Mr Turner's primary affidavit, and his supplementary affidavit, on the basis that they did not set out the grounds for his belief of the truth of the facts to which he deposed, to the extent they were not within his personal knowledge, in breach of r 22.04(3) of the Rules. Further, counsel for the defendants submitted that Mr Turner's primary affidavit did not verify the facts on which the part of the claim in respect of which summary judgment is sought was based, as required by r 22.04(1)(a) of the Rules. I ruled against those objections, for the reasons that appear in my exchange with counsel. I now articulate those reasons.

28 In my exchange with counsel for the defendants he conceded that every paragraph of Mr Turner's primary affidavit other than the formal paragraphs either set out facts admitted by the defendants in their Amended Defence (paragraph 3 of Mr Turner's primary affidavit); or put into evidence documents of the defendants or documents otherwise admissible under the Evidence Act 2008 (Vic). Counsel's submission against admission of the evidence, nevertheless, was twofold. First, he submitted that the admitted facts, as set out in paragraph 3 of Mr Turner's primary affidavit, were not the facts of the claim. In his submission, the facts of the claim which required verification were the alleged breach of fiduciary obligations. In my view, this is incorrect. The plaintiff's characterisation of the facts admitted by the defendants in their Amended Defence as constituting a breach of the fiduciary obligations owed by the first defendant to his mother is a submission, it is not a fact that requires verification. The relevant facts are the withdrawal and use by the first defendant of $552,000 of the proceeds of sale of his mother's home for his own purposes while her administrator. All those facts are agreed.

29 Dr Glover's second submission was that notwithstanding that those facts were admitted, they still required verification and Mr Turner's affidavits did not verify them. In my view this submission misunderstands what is required in the evidence on an application for summary judgment. A plaintiff seeking summary judgment is only required to prove by evidence facts essential to the claim on which summary judgment is sought that are not admitted. Rule 22.04 does not require more, because to hold otherwise would be to entirely negate the intent and effect of pleading. Accordingly, the essential facts for this application for summary judgment on part of the plaintiff's ASOC do not require proof on evidence and so verification, although for convenience or out of an abundance of caution Mr Turner does in fact exhibit documents which establish them.

30 I summarise below the submissions that were put to me orally at the hearing, which to some extent bore a different emphasis to those provided in written form prior to the hearing. For that reason, and because of the delay in giving judgment, I have caused the transcript of oral argument to be obtained which is available on the Court file.

31 As noted earlier, the plaintiff accepts that for the purposes of this application, the authenticity of the Family Agreement is to be assumed. The plaintiff submits that that document is not in itself a loan agreement - it is more appropriately characterised as a document on its face signed by Mrs Lambrou and her late husband evidencing prior loans to them from Emmanuel in the sum of $887,000 in the period 29 February 1980 to 18 December 2001, and giving authority to Emmanuel to repay himself for those loans 'when funds become available in the future'.

Scope of fiduciary obligation as administrator

32 The plaintiff accepts that the scope of a fiduciary obligation will depend on the facts of the particular case.[7] It follows that it is not theoretically impossible for the scope of the fiduciary duty of an administrator to be limited, so as to exclude the operation of the conflict and profit rules to a particular transaction. However, the plaintiff relies on two principal matters to submit that the defendants have no real prospect of success in contending that the scope of the fiduciary duty cast on the first defendant by his appointment by VCAT as administrator excluded dealing with the proceeds of sale of her home to his benefit.

33 The first matter are the provisions of the Guardianship and Administration Act 1986 (Vic) (GA Act) that relate to appointment as an administrator. To appoint the first defendant administrator VCAT was required to be satisfied that he was not in a position where his interests did or might conflict with the interests of his mother (s 47(1)(c)(ii)). As administrator, the first defendant was required to act in his mother's best interests (s 49(1)). If he wished to contend that he was entitled to use some or all of the proceeds of the sale of her home for his benefit by virtue of the Family Agreement, he could have, and the plaintiff contends he should have, either given evidence of the Family Agreement at the time of his appointment, and sought that his obligations be limited accordingly in the order appointing him, or subsequently sought the advice of VCAT on that point pursuant to s 55 of the GA Act. The first defendant has not given any evidence that he followed either course, and there is no such carve out in the order made by VCAT.

34 The second limb of the plaintiff's submission relies on authority to the effect that if the scope of the fiduciary duty of an attorney, and by analogy an administrator, is to be limited to allow the attorney/administrator to deal with the property of his principal for his own benefit, specific and unambiguous words of limitation are required.[8]

35 In the absence of any term of the appointment of the first defendant as administrator permitting him to deal for his benefit with the proceeds of sale of the plaintiff's home and in the absence of any application by him to VCAT for such permission, the plaintiff submits that the defendants have no real prospect of success in contending that the fiduciary obligations cast upon the first defendant excluded his dealing with the proceeds of sale of his mother's home by reason of the Family Agreement.

36 If these fiduciary obligations extended to the proceeds of sale of his mother's home, then the plaintiff submits that by utilising $552,000 of the proceeds for his own purposes the first defendant was in clear breach of the obligations not to place himself in a position of conflict with his mother's interests, and not to profit from his position as administrator. The plaintiff submits that it is not necessary for Mrs Lambrou to establish that there was in fact a conflict or a profit - merely that there was a possibility of same, with the necessary consequence that acting in his own interests despite that possibility means that the first defendant acted in breach of his obligations.

37 The plaintiff says that breach by virtue of the possibility of conflict and profit is shown by reason of three matters. First, there was the possibility that any entitlement of the first defendant to property or funds of his mother by virtue of the Family Agreement had already been met by the transfer to him and his wife for no valuable consideration of Lot 2 following the subdivision of the plaintiff's land at 3 Lee St, Flemington. The defendants rely on the Family Agreement in their Amended Defence as one of the factors justifying this transfer.[9] The plaintiff concedes that there is no valuation evidence before the Court on this application to show the value of this transfer, but submits that that does not prevent the possibility that a claim on the proceeds of sale of Lot 1 to the extent of $552,000 pursuant to the Family Agreement had already been extinguished by the transfer of Lot 2.

38 The second matter said by the plaintiff to establish breach is that to the extent the Family Agreement constituted an authority to deal with the property of the plaintiff to the sum there indicated, it was a revocable authority. If it could be revoked, then reliance on it would necessarily be in potential conflict with the interests of Mrs Lambrou.

39 The third matter said to show the possibility of conflict is that there must be serious doubt as to whether the loans underpinning the Family Agreement remained enforceable given the effluxion of more than six years between both the loans and the dealing with the plaintiff's funds, and the acknowledgement in the Family Agreement and the dealing. This submission rests on the principle that a loan repayable on demand is ordinarily statute barred after six years.

40 The plaintiff submits that given these matters, there was the clear possibility of conflict between the interests of the first defendant and the interests of the plaintiff and the clear possibility that he would profit from his appointment as his mother's administrator. Given that possibility, it was a breach of his obligations as administrator to take the admitted $552,000 of the plaintiff's funds for his own purposes. The plaintiff seeks a declaration to this effect and order that the first defendant repay this sum, with interest. The plaintiff submits that this is the appropriate form of relief as it reverses the improper transaction, but does not extinguish any right the first defendant has to the funds. He could still pursue any entitlement to repayment of loans against the plaintiff, or, now, the plaintiff's estate. No such claim is currently made by the defendants.

41 The primary submission for the defendants is that they have a real prospect of success in establishing that the fiduciary obligations cast upon the first defendant by his appointment as his mother's administrator did not extend to repayment of loans owed to him, as acknowledged by his mother in the Family Agreement. Accordingly, they have a real prospect of success in resisting the plaintiff's claim that the first defendant acted in breach of those obligations by dealing with this mother's funds to repay himself pursuant to that Agreement.

42 In making this submission, counsel for the defendants relies on the principle that fiduciary relationships are dependent upon, and liable to conform to, contract terms between the parties. He concedes that the Family Agreement may itself not be a contract, as it refers only to past consideration, and so may be only an acknowledgement of debt, or an imperfect gift. He contends, however, that its true construction is a matter for trial following the evidence of the people concerned in the making or witnessing of the document. He submits that even if not a contract, the Family Agreement may still have limited the scope of the duty imposed upon the first defendant by his appointment as administrator.

43 If, against their submission, the Court holds that the scope of the first defendant's duty was not limited by the Family Agreement, then the defendants submit that nevertheless the question of breach should not be determined on a summary basis. They submit that evidence at trial is required to establish the plaintiff's assertion that any entitlement pursuant to the Family Agreement may already have been satisfied, or partially satisfied, by the gift to the defendants of Lot 2. Similarly, they contend that the assertion that the Family Agreement was revocable should not be determined on a summary basis, and should be determined at trial on evidence as to all the circumstances. In relation to the assertion that the loans said to underpin the Family Agreement were statute barred, and so the Family Agreement could no longer afford an entitlement to repayment, they say that for the following reasons it would be unsafe to find breach on this basis in this application. First, the question of limitation has not been pleaded in reply, and, secondly, there is evidence of subsequent admissions of debt by the plaintiff (on dates unknown) in Emmanuel's affidavit sworn 21 July 2017 so that on the facts recovery on the loans may still have been permissible at law.

44 The defendants concede that the first defendant was in a fiduciary relationship to his mother by virtue of his appointment as her administrator. However, they assert that by virtue of the Family Agreement that relationship excluded the repayment to the first defendant of the loans acknowledged in that document. The first question is whether the defendants have a real prospect of success of establishing this contention, or whether their prospects of such success are only fanciful.

45 The law in relation to fiduciary obligations was considered in detail by the High Court in Hospital Products Ltd v United States Surgical Corporation (Hospital Products).[10] In that case, Gibbs CJ observed that '...it is clear that in the case of every fiduciary relationship it is critical to determine what is the subject of the fiduciary obligation'.[11] Mason J noted to the same effect in his judgment that 'it is now acknowledged generally that the scope of the fiduciary duty must be moulded according to the nature of the relationship and the facts of the case'.[12]

46 The parties have directed me to illustrations of this general principle, including Chan v Zacharia (Chan),[13] United Dominions Corp Ltd v Brian Pty Ltd (United Dominions),[14] and Canberra Residential Developments Pty Ltd v Brendas (Brendas).[15] These cases all deal with the extent of fiduciary obligations in a commercial context, where the extent of the obligations was to be determined having regard to contractual obligations. Hospital Products was also such a case. In Chan and United Dominions the High Court held that the fiduciary obligations extended to the subject transaction; in Brendas the Full Court of the Federal Court held that they did not. In Hospital Products, there was a division of opinion amongst the bench of the High Court as to whether there was a relevant fiduciary obligation, as opposed to a purely contractual one, at all. In each case, the court undertook a factual and legal enquiry into the nature of the relationship, including the nature and extent of the contractual obligations between the parties.

47 The defendants have also referred me to Daly v Sydney Stock Exchange Ltd (Daly).[16] In that case, the High Court considered whether as a consequence of the fiduciary obligation owed to an investor by a firm of stockbrokers monies lent to the firm by the investor were held on constructive trust. The Court held that on the facts of that case they were not.[17] I accept that the case is an illustration of a fiduciary obligation being excluded by the nature of the contract between the parties, but have doubts has to whether the facts are analogous to those before me. In Daly funds had been advanced by the person to whom the fiduciary obligation was owed, and it was held that the relationship in that respect was one of creditor/debtor, not beneficiary/trustee. Here, no funds were advanced by Mrs Lambrou to her son - the transaction relied on by the defendants is the reverse.

48 The cases to which I was referred all concern commercial relationships, but there is nothing in the statements of principle to be found within them that confines the possibility that the scope of a fiduciary obligation may be limited by the facts of the case to purely commercial relationships, or to confinement of the fiduciary obligation by contract. Accordingly, I proceed with my analysis on the basis that the principle that the scope of fiduciary obligations may be limited to exclude certain transactions or to allow for the fiduciary to profit from his appointment in certain respects also may apply to statutory appointment as an administrator depending on the facts of the particular case. The question then becomes whether sufficient facts are before me on this application to safely determine whether the defendants have a real prospect of success in contending that the first defendant's appointment did exclude repayment of loans made by him to his parents.

49 The defendants' contention is essentially that the determination of the scope of the fiduciary obligation imposed on the first defendant by his appointment as administrator should be determined at trial after all the evidence. The plaintiff's contention at its highest is that consideration of the administration order itself is sufficient. In the plaintiff's submission this flows from application of the principle in Tobin v Broadbent that specific and unambiguous words are required to permit an attorney, and, by analogy, an administrator, to deal with the property of his principal for his own benefit, and from the statutory framework in which the appointment order was made.

50 I do not accept the submission by the defendants that it is necessary for the Court to hear all the evidence relating to the making of the Family Agreement, and potentially the loans said to underpin it, before determining if it limited Emmanuel's later appointment as administrator. The plaintiff concedes that the Family Agreement is authentic, for the purposes of this application, and that is sufficient.

51 As to what the plaintiff must prove, I consider that the plaintiff's submission that any exclusion or limitation of the administration order must be apparent on the face of the order is likely correct. However, to be confident that the defendants have no real prospect of success in establishing a limitation I have carefully considered all of the material before VCAT that is in evidence in this application, and have not confined my scrutiny to the appointment order itself. If there was further relevant material before VCAT, the defendants had the opportunity in this application to put it into evidence, and they have not done so.

52 The plaintiff has put in evidence the application for appointment.[18] It does not refer to the Family Agreement. I observe that nor does it include other information required by the application form, such as identifying Emmanuel and Christos as the children of Mrs Lambrou, or the existence of the purported power of attorney. The application form is not signed by Emmanuel, but if there was other information before VCAT when it made the order in his favour, he has not put it into evidence.

53 Nor is there any exclusion in the order appointing Emmanuel administrator[19] for any transaction, or having regard to any pre-existing obligation owed by Mrs Lambrou to him. This is to be contrasted with the guardianship order made the same day, which appointed Emmanuel limited guardian only, with specified areas of responsibility.

54 The first reference to any loans made by Emmanuel to his parents in orders of VCAT or documents filed at VCAT that are in evidence in this application is in the VCAT order of 26 July 2016 that relevantly provides '(i)t would assist at the future hearing of this matter if the administrator filed a sworn affidavit providing details of the various loans (amounts and dates) made by him to his parents...'.[20] It would seem from this order that Emmanuel had referred in some way to loans before VCAT, although he makes no reference to any loans made by him or to the Family Agreement in the statutory declaration signed by him on 20 July 2016 and filed at VCAT.[21] The first explicit reference by Emmanuel to loans made by him to his parents and to the Family Agreement in documents he filed at VCAT that are in evidence in this application is in his affidavit sworn 10 October 2016.[22]

55 Thus the evidence does not show that VCAT was apprised before making the administration order of the existence of the Family Agreement or that Emmanuel contended that his mother owed him money which he was entitled to take from the sale proceeds of her home prior to making the order for administration, and no limitation to this effect is included in the order itself. There is also no suggestion or evidence that Emmanuel sought the advice and approval of VCAT after his appointment before taking the sale proceeds.

56 For these reasons I do not consider that the defendants have any real prospect of success in establishing at trial that the fiduciary obligations imposed on Emmanuel by his appointment as his mother's administrator excluded from their scope dealing with his mother's property to the extent of the loans acknowledged in the Family Agreement.

57 The next question is whether the defendants have any real prospect of success in resisting the plaintiff's claim that the first defendant acted in breach of his obligations, if those obligations included a prohibition on dealing with his mother's property for his own benefit.

58 Simply to state the proposition is to answer it, because the defendants do not quarrel with the plaintiff's proposition that a significant possibility of conflict between personal interest and duty is sufficient to establish breach of a fiduciary duty if a benefit is nevertheless taken.[23] The possibility of such a conflict would have been plain to the defendants properly advised, even assuming the Family Agreement to be valid and enforceable.

59 I accept the defendants' submission that they have more than a fanciful prospect of success in establishing on further evidence at trial that the Family Agreement was valid and enforceable. However, I do not consider that this negates a finding that they have no real prospect of success in resisting the allegation of breach, once scope of the duty is determined against them. The issues about validity and enforceability of the Family Agreement cannot go not to breach of duty. They can only go, in my view, to the extent of the breach i.e. to quantum. If the first defendant seeks to assert his entitlement to repayment by a counterclaim, and is successful, then there may also be an offsetting claim which will also affect the final amount to be awarded to the plaintiff's estate.

60 For these reasons, I do not consider that the defendants have any real prospect of success in establishing that the first defendant did not breach the fiduciary obligations imposed on him by the administration order not to act in conflict, or possible conflict, with the interests of his mother and not to profit by reason of his appointment.

61 The plaintiff seeks both a declaration of breach and an order for repayment of the amount the first defendant concedes he took from the proceeds of sale of his mother's home, being $552,000, with interest and without prejudice to the plaintiff's right to seek a higher amount at trial.

62 My concern with an order for repayment is that the sum found owing to the plaintiff may well change substantially after trial. This concern has two limbs. First, the plaintiff reserves the right to challenge the authenticity of the Family Agreement at trial, and seeks additional relief in respect of the transfer of Lot 2 to the defendants. If the plaintiff is successful in either of those aspects, a larger sum may be found due.

63 An increase in the amount owing is not, of course, necessarily a difficulty. However, it is also conceivable that the amount ultimately found owing could be less. As noted above, if the first defendant brings a counterclaim based on the Family Agreement and the Family Agreement is found to be authentic (which the plaintiff concedes for this application); enforceable; was not revoked; and was not exhausted by the gift of Lot 2 to the defendants (none of which are conceded) then the first defendant may be awarded a sum to offset the sum for which summary judgment in sought. This may then sound in the amount of relief awarded to the plaintiff's estate, and possibly the form of that relief.

64 No counterclaim is yet pleaded and none of the questions identified above, or others that might arise on such a counterclaim, can be determined in this application.

65 At the time the application was filed and argued, the plaintiff was still alive. If in need of funds for her care, then there may have been utility in fixing an order for payment now, even though it may increase at trial. Any such necessity has now been overtaken by events.

66 It follows that it is difficult to identify what relief can properly be given in this application other than a bare declaration, or declaration with an accompanying order for damages to be assessed. As set out further below, I will give the parties an opportunity to be heard on this question if that is sought.

67 Section 64 of the CPA confers a discretion on the Court to refuse summary judgment, even where the defence has no real prospect of success. That section provides as follows:

64 Court may allow a matter to proceed to trial

Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because -

(a) it is not in the interests of justice to do so; or

(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.

68 The parties did not put any explicit submissions to me at the hearing as to whether this discretion should be exercised against the grant of summary judgment, but I consider that it is a live issue given that summary judgment is sought on part only of the claim, and given the current state of the pleadings.

69 The first relevant matter is that the plaintiff has not pursued the initial application for summary judgment in respect of the subdivision and transfer of Lot 2, perhaps because the questions as to the ability of Mrs Lambrou to give informed consent to those transactions and whether she did in fact do so are contested, and will depend on evidence at trial. While there is no dispute that by the time of the first defendant's appointment as her administrator and the subsequent sale of her home she could no longer manage her financial affairs, evidence as to when she became relevantly cognitively impaired may also bear on whether any acknowledgements of debt said to have been made by her after the Family Agreement are legally enforceable at the instance of the first defendant.

70 Even more significantly, the defendants rely on the Family Agreement not just in relation to the receipt by the first defendant of a substantial portion of the proceeds of sale of Lot 1, but also as justification, or part justification, for the earlier subdivision and transfer to them of Lot 2. Whether those transactions survive the plaintiff's challenge is conceded to be determinable only at trial, and may depend on a number of matters, including whether the Family Agreement is found to be valid and enforceable. If the transfer of Lot 2 survives challenge, there is no evidence before me in this application as to the amount of the benefit that the defendants received from the transfer of Lot 2 and to what extent, if at all, that should be credited against any debt owed by Mrs Lambrou to the first defendant.

71 Further, the plaintiff accepts the authenticity of the Family Agreement for the purposes of this application, but reserves the right to contest its authenticity at trial. It could be perceived as artificial to accept the authenticity of the Family Agreement for one purpose (this application for summary judgment) while leaving open the possibility of challenge to it at trial.

72 The possibility discussed earlier that the amount that the plaintiff will ultimately receive at trial may be more or less than what is sought in this application and the fact that the issues may change before trial are also factors that may be relevant to the exercise of the discretion. The plaintiff is entitled to seek summary judgment on the pleadings and evidence as they stand at the time of the application, but it seems likely that substantial amendment to the pleadings may be sought, and indeed necessary, before trial. At the least, the defendants should seek to amend their Amended Defence to bring it into line with the first defendant's evidence in this application, and he may wish to plead a counterclaim. Once the defence and any counterclaim is properly pleaded, the plaintiff will wish to consider a defence to any counterclaim and any reply. If a counterclaim is pleaded, and is successful, then the amount to be awarded to the plaintiff is quite uncertain.

73 I identify these factors for the assistance of the parties in relation to any further submissions they wish to put, but they are not intended to exclude identification of other relevant matters. On the basis of the factors I have identified, and subject to further submission, my preliminary view is that the proper approach is to give summary judgment on the breach of fiduciary obligation in respect of the sale proceeds, because it is warranted and will remove one issue from trial, but by way of declaration only, for an amount to be determined at trial. As I have not heard from the parties on the question of the discretion, or in detail as to the form of relief if summary judgment is to be given, I will give them an opportunity to make submissions after consideration of these reasons.

74 I conclude that the defendants have no real prospect of success in establishing that fiduciary duty imposed on the first defendant by the order appointing him his mother's administrator excluded and so permitted dealing with his mother's assets to repay himself for the debts said to be acknowledged by her in the Family Agreement. I further conclude that the defendants have no real prospect of success in resisting the plaintiff's claim that the first defendant breached that duty by taking for himself $552,000 of the proceeds of the sale of his mother's home. It is not necessary or possible for me to determine in this application the first defendant's prospects of success in any offsetting claim that he may bring in reliance on the Family Agreement.

75 I will hear the parties further if either so requires as to whether the discretion against the grant of summary judgment should nevertheless be exercised, and will also hear them as to the appropriate form of relief if summary judgment is to be given, and as to costs unless agreed.

76 I ask the parties to confer and prepare proposed orders to give effect to these reasons, agreed to the extent possible. Those orders should include the proposed timetable for any further interlocutory steps, including any proposed amendment to the pleadings, and reflect any proposed appointment of an administrator of the deceased estate of Mrs Lambrou. At an appropriate time, the proceeding will be referred back to the judge in charge of the Trusts, Equity and Probate List. This will be at the latest for trial directions.

[1] Pleaded at [12] of the Amended Defence (in relation to subdivision) and [14] in relation to the transfer of Lot 2.

[2] Affidavit of Emmanuel George Lambrou sworn 21 July 2017. Exhibit EL-1

[3] Affidavit of Emmanuel George Lambrou sworn 21 July 2017, [12].

[4] [2013] VSCA 158

[6] Affidavit of Ian Turner sworn 5 July 2017 (Mr Turner's primary affidavit).

[7] Hospital Products Ltd v Unites States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, at 69, 73 per Gibbs CJ and 102 per Mason J.

[8] Tobin v Broadbent (1947) 75 CLR 378, per Dixon J at 401.

[10] [1984] HCA 64; (1984) 156 CLR 41.

[13] [1984] HCA 36; (1983-1984) 154 CLR 178.

[14] [1985] HCA 49; (1985) 157 CLR 1, [11] (Mason, Brennan and Deane JJ).

[15] [2010] FCAFC 125; (2010) 188 FCR 140, 147 [36].

[16] [1986] HCA 25; (1986) 160 CLR 371.

[17] Ibid, [377]-[380] (Gibbs CJ); [389]-[390] (Brennan J).

[18] Mr Turner's primary affidavit, Exhibit IT-4.

[22] Ibid, Exhibit IT-7 [21]-[26], [32].

[23] Plaintiff's Submissions dated 12 September 2017, [19].