AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
sentations under the Australian Securities and Investments Commission Act 2001 (Cth), where time starts to run from when the alleged offence occurs. At the state level, fraud extends the limitation period in relation to the causes of action avail - able in the Australian jurisdiction to fraud vic - tims, which depends on the cause of action itself (tort, contract, etc) (Limitation of Actions Act 1958 (Vic) Section 27; Limitation of Actions Act 1974 (Qld) Section 38; Limitation Act 1985 (ACT) Section 33; Limitation Act 2005 (WA) Section 38; Limitation of Actions Act 1936 (SA) Section 25; Limitation Act 1974 (Tas) Section 32, Limitation Act 1981 (NT) Section 42; Limitation Act 1969 (NSW) Section 55). For example, Section 55 of the Limitation Act 1969 (NSW) provides that the relevant limitation period for actions based on fraud or deceit, or actions where the identity of a person against whom a cause of action lies is fraudulently con - cealed, only starts running from when “person having (either solely or with others) the cause of action first discovers, or may with reasonable diligence discover, the fraud, deceit or conceal - ment” . 1.5 Proprietary Claims Against Property Where the misappropriated property can be suf - ficiently identified (whether it be within mixed funds, property that is substituted for the origi - nal, or any proceeds from the sale of the prop - erty) and the claimant can establish a proprietary entitlement to that property via tracing rules, the court will exercise its equitable jurisdiction to recognise the proprietary claim and will grant an appropriate remedy in the circumstances. The exception to this is where the claimant seeks a remedy against a bona fide purchaser for value
of the property without notice of the claimant’s equitable interest. In RnD Funding Pty Limited v Roncane Pty Limited [2023] FCAFC 28, the Federal Court of Australia recently confirmed that a pre-existing fiduciary duty between the party asserting the equitable proprietary right and the party who holds or has disposed of the original property is not a requirement for tracing in equity. Rather, it is the nature of the equitable property rights that forms the foundation of tracing. There are complex apportionment and prior - ity rules which exist for the proceeds of fraud that have been mixed with other funds. If the recipient purchases something valuable with misappropriated funds from a mixed account, the claimant may be entitled to claim a charge on the asset purchased, provided the asset is identifiable (Re Oatway [1903] 2 Ch 356 applied recently in Re Renewable Energy Traders Pty Ltd (in liq) (ACN 140 736 849) [2019] 140 ACSR 466; [2019] FCA 1795). If the claimant’s property is traced to a third party, whether the claimant has any proprietary claim depends on whether the third party was a bona fide purchaser of the property or a mere volunteer (Commonwealth Bank of Australia v Saleh & Ors [2007] NSWSC 903). The claimant may not claim against a bona fide purchaser for value, who had no notice of the existence of a prior interest. On the other hand, where third parties receive property as volunteers, they may be liable as constructive trustees. In this case, the claim - ant and third party would share the property in proportion to their contributions (In re Diplock; Diplock v Wintle [1948] Ch 465 cited in Com - monwealth Bank of Australia v Saleh & Ors [2007] NSWSC 903). In circumstances where the third party uses the claimant’s money on improv -
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