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Chan v Valmorbida Custodians Pty Ltd

Chan v Valmorbida Custodians Pty Ltd

Case [2021] VSC 527 27 August 2021

Fiduciary Duty

Equitable Estoppel

Admissibility of Evidence

Legal Privilege

Specific Performance

Trusts & Equity

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

COMMERCIAL LIST

S CI 2017 03211

KAIRU (ERICA) CHAN & Ors (according to the attached Schedule)	Plaintiffs
v
VALMORBIDA CUSTODIANS PTY LTD (ACN 609 840 539) & Ors (according to the attached Schedule)	Defendants

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JUDGE:	Matthews AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	24-25 May 2021
DATE OF RULING:	27 August 2021
CASE MAY BE CITED AS:	Chan v Valmorbida Custodians Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 527

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EQUITY – Trusts – Beneficiary application for inspection of trust documents granted in the exercise of the Court’s supervisory jurisdiction – Trustees withheld certain “excluded documents” from production on the basis of legal professional privilege and on the grounds of confidentiality – Beneficiary disputed large number of the excluded documents – Application of Evidence Act 2008 (Vic) – Trustees’ claims regarding privilege largely upheld – Privilege claims in respect of third parties analysed – Trustees’ claims regarding confidentiality upheld – Court’s inspection of documents – Evidence Act 2008 (Vic) ss 118, 119, 122, 131A – Chan v Valmorbida Custodians Pty Ltd (Ruling) [2020] VSC 590 – Schreuder v Murray [No 2] (2009) 260 ALR 139 – IOOF Holdings Ltd v Maurice Blackburn Lawyers Pty Ltd [2016] VSC 311 - Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2011] VSC 477 - Farrow Mortgage Services v Webb (1996) 39 NSWLR 601 - Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405 - Hancock v Rinehart [2015] NSWSC 646 – Deutsch v Trumble (2016) 52 VR 108.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Ms C H Sparke QC	Arnold Bloch Leibler
For the second, third and fourth Defendants	Mr J S Graham QC with Mr R Chaile	Lawson Hughes Peter Walsh
Iconic Food Distributions Pty Ltd and Sirena (Aust) Pty Ltd, Interested Parties	Mr P Somers, solicitor	Russell Kennedy

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background......................................................................................................................................... 2

The parties and the trusts............................................................................................................. 2
The proceedings............................................................................................................................ 4
The key issues and claims in the Trustee Removal Proceeding and the Golden Fin Proceeding................................................................................................................................................ 6
The orders made on 14 September 2020.................................................................................... 8
Summary of process used by the Trustees to produce the Trust Documents and to identify the Excluded and Other Withheld Documents................................................................... 11

Consideration.................................................................................................................................... 14

The Court’s approach to considering the disputed documents........................................... 14
The Court’s inspection of disputed documents...................................................................... 15

Legal professional privilege.......................................................................................................... 16

Does the Evidence Act or the common law apply in these circumstances?....................... 17
General principles regarding legal professional privilege.................................................... 19
Statutory provisions.......................................................................................................... 19
Applicable Principles........................................................................................................ 21

When a trustee can validly withhold documents from a beneficiary on the grounds of legal professional privilege........................................................................................................ 23
The Plaintiffs’ submissions............................................................................................... 23
The Trustees’ submissions................................................................................................ 24
Consideration..................................................................................................................... 26

Waiver or loss of privilege......................................................................................................... 29
Plaintiffs’ submissions...................................................................................................... 29
Trustees’ submissions....................................................................................................... 32
Consideration..................................................................................................................... 33

Confidentiality................................................................................................................................. 35

Plaintiffs’ submissions................................................................................................................ 35
Trustees’ submissions................................................................................................................. 36
Consideration.............................................................................................................................. 39

Application to disputed documents as set out in the Hughes Schedules............................. 40

Schedules concerning documents withheld on the basis of privilege claims…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Chan v Valmorbida Custodians Pty Ltd

Details

AGLC: Chan v Valmorbida Custodians Pty Ltd [2021] VSC 527
Case: [2021] VSC 527
Decision Date: 27 August 2021

CaseChat Overview and Summary

The case of Chan v Valmorbida Custodians Pty Ltd involved a beneficiary seeking inspection of documents held by the trustees of a trust. The application was made in the Supreme Court of Victoria, seeking to exercise the Court's supervisory jurisdiction over the trust. The trustees resisted the application, withholding certain documents on the basis of legal professional privilege and confidentiality. The beneficiary challenged the trustees’ refusal to produce these documents, leading to a detailed examination of the claims of privilege and confidentiality by the Court.

The primary legal issues before the Court were whether the trustees' claims of legal professional privilege and confidentiality were valid. The Court needed to determine whether the trustees were justified in withholding the documents from inspection under the Evidence Act 2008 (Vic). This involved a review of the nature of the documents, the context in which they were created, and the relationship between the trustees and the parties involved in creating the documents. The Court also had to consider the impact of the Evidence Act provisions on the application of legal professional privilege in the context of trust administration.

The Court found that the trustees’ claims of legal professional privilege were largely upheld, with particular attention given to the privilege claims concerning third parties. The Court acknowledged the importance of protecting communications between lawyers and their clients but scrutinised the extent to which these communications related to the trust’s administration. Regarding confidentiality, the Court upheld the trustees’ claims, finding that the nature of the documents warranted protection to maintain the integrity of the trust and its beneficiaries. The Court conducted an inspection of the documents in camera to balance the need for transparency with the protection of sensitive information. The Court's detailed analysis was guided by relevant statutory provisions and precedents, ensuring a fair and balanced approach to the exercise of its supervisory jurisdiction.

The final orders of the Court largely upheld the trustees' claims of privilege and confidentiality, allowing the inspection of the documents in camera. The Court emphasised the importance of the trust’s proper administration and the need to protect the interests of all beneficiaries. The decision provides clarity on the application of legal professional privilege and confidentiality in the context of trust inspections, highlighting the Court's role in balancing these interests with the need for transparency and accountability.

Orders