| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S CI 2017 03211
| KAIRU (‘ERICA’) CHAN & ORS | Plaintiffs |
| v | |
| VALMORBIDA CUSTODIANS PTY LTD (ACN 609 840 539) & ORS (according to the Schedule) | Defendants |
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JUDGE: | DELANY J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 24 July 2020 |
DATE OF JUDGMENT: | 14 September 2020 |
CASE MAY BE CITED AS: | Chan v Valmorbida Custodians Pty Ltd (Ruling) |
MEDIUM NEUTRAL CITATION: | [2020] VSC 590 |
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EQUITY – Trusts – Beneficiary application for inspection of trust documents – Alleged breach of trust – Existing and prospective discovery orders – Piecemeal provision of limited trust documents – Whether beneficiary proprietary right to inspection – Whether inspection discretionary in court’s supervisory jurisdiction – Application granted – Orders made for inspection to enable meaningful scrutiny of administration of trusts – O’Rourke v Darbishire [1920] AC 581, Schmidt v Rosewood Trust Ltd [2003] 2 AC 709, Deutsch v Trumble [2016] VSC 263, (2016) 52 VR 108; Erceg v Erceg (2017) 1 NZLR 320 considered.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Ms C Sparke QC with Mr J Barber and Mr J Carney | Arnold Bloch Leibler |
| For the first Defendant | Ms L Buckley, solicitor | KCL Law |
| For the second, third and fourth Defendants | Mr S Senathiraja QC with Mr J Graham | Lawson Hughes Peter Walsh |
| For the fifth Defendant | Mr I Waller QC with Mr J Mereine | HWL Ebsworth |
HIS HONOUR:
The parties and the trusts
Kairu (‘Erica’) Chan personally ( the first plaintiff) and in her capacity as the executrix of the estate of her late husband, Adrian Valmorbida (deceased)( the second plaintiff) is the moving party in this litigation. Shortly after the death of her husband, Adrian Valmorbida, aged 57, on 4 August 2016, after a long battle with cancer, there was a falling out between Kairu Chan and her two young daughters, Xuan Valmorbida, born 6 September 2006, and Ruowei Valmorbida, born 27 August 2012, and the Valmorbida family.
In 2017 three separate proceeding were issued in this Court, including this proceeding (the ‘Trustee Removal Proceeding’).
Admarval Pty Ltd (‘Admarval’, the third plaintiff) is a company that, prior to his death, was controlled by Adrian and is now controlled by Kairu Chan. As well as holding all of the shares in Admarval, Kairu Chan is and since 26 October 2016 has been the sole director of Admarval.
From 23 May 2006 when the Admarval Trust was established until December 2016, Admarval was trustee of the Admarval Trust. The Principals (protectors) of the trust as named in the original trust deed were Adrian and his father Mariano Valmorbida. On 12 February 2016 Adrian and Mariano appointed Valmorbida Custodians Pty Ltd (‘VCPL’) as the Principal of the trust.
Adjoval Pty Ltd (‘Adjoval’, the fourth plaintiff) is trustee of the Adrian Valmorbida Family Trust (‘AVFT’). Adjoval is a company also controlled by Kairu Chan. It was added as a plaintiff to this proceeding on 24 July 2020.
VCPL…
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- Case
- [2020] VSC 590
- Decision Date
CaseChat Overview and Summary
The court examined whether the beneficiary had a proprietary right to inspect the trust documents, considering the precedent set by cases such as O’Rourke v Darbishire and Schmidt v Rosewood Trust Ltd. The court noted that the inspection of trust documents is integral to a beneficiary's ability to oversee the trustees' administration. The court also evaluated whether the inspection was within the discretionary powers of the court, referencing Deutsch v Trumble and Erceg v Erceg. Ultimately, the court found that the plaintiff had a legitimate interest in the inspection of the trust documents to enable meaningful scrutiny of the trustees' actions. The court concluded that the inspection was necessary to protect the plaintiff's interests and ensure the proper administration of the trusts.
In light of the findings, the court granted the application for inspection and made orders to facilitate a comprehensive review of the trust documents. The orders required the trustees to provide all relevant documents to the plaintiff, ensuring that the inspection was thorough and not limited to selective disclosure. This decision underscored the importance of transparency and accountability in trust administration. The court's ruling aimed to safeguard the beneficiaries' rights and maintain the integrity of the trust arrangements.
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
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Ratio Decidendi
Legal Principle Established
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