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Chang v Tjiong

Chang v Tjiong

Case [2022] NSWSC 1092 16 August 2022

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Supreme Court

New South Wales

Medium Neutral Citation: Chang v Tjiong [2022] NSWSC 1092
Hearing dates: 29 November 2021, 9 and 16 March 2022
Date of orders: 16 August 2022
Decision date: 16 August 2022
Jurisdiction: Equity
Before: Henry J
Decision:
Declarations and orders made in relation to the Burwood Trust, including to appoint independent trustees: see [141]

Catchwords:
EQUITY — Trusts and trustees — Trust powers — Powers of appointment — Application for appointment of independent trustees — Whether trust was determined by payments by trustee to person who was an object of a discretionary trust — Where payments made from an account in which trust funds were mixed with personal funds — Whether payment made in breach of trust — Where trustee died and administrator of his estate is an object of the discretionary trust

Legislation Cited:
Civil Procedure Act 2005 (NSW)
Trustee Act 1925 (NSW)

Cases Cited:
Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588; [2000] HCA 25
Australian Receivables Ltd v Tekitu Pty Ltd (Subject to Deed of Company Arrangement) (Deed Administrators Appointed)& ors [2011] NSWSC 1306
Ballenden v Bryant(No 1) [2012] NSWSC 1471
Chang v Tjiong & Ors [2009] NSWSC 122
Gibson v G & A Cork Memorial Company Ltd [2021] NSWSC 945
In the matter of Austec Wagga Wagga Pty Limited (in liquidation) [2018] NSWSC 1476
James Roscoe (Bolton) Limited v Winder [1915] 1 Ch 62
Laycock v Registrar General of New South Wales [2012] NSWSC 248
Re Global Finance Group Pty Ltd [2002] WASC 63
ReHallett’s Estate; Knatchbull v Hallett (1880) 13 Ch D 696
Tjiong & Anor v Tjiong [2010] NSWSC 578
Tjiong v Tjiong [2012] NSWCA 201
Tjiong v Tjiong [2021] NSWSC 1389
Watsonv Foxman (1995) 49 NSWLR 315

Texts Cited:
HAJ Ford and WA Lee, The Law of Trusts (4th ed, Thomson Reuters, loose-leaf)
J D Heydon and M J Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis)

Category: Principal judgment
Parties: Tzer Chin Chang (Plaintiff/Cross-Defendant)
Katrina May Lan Tjiong (Defendant/Cross-Claimant)
Representation:
Counsel:
D Barlin with T Harris-Roxas (Plaintiff/Cross-Defendant)
M B Evans (Defendant/Cross-Claimant)
Solicitors:
Commlex Pty Ltd (Plaintiff/Cross-Defendant)
O'Brien Lawyers (Defendant/Cross-Claimant)

File Number(s): 2020/217303
Publication restriction: Nil

Judgment

This proceeding concerns a trust created in the 1970s by the late Mr Hok Tjiong over a unit in Burwood (Unit), initially for the benefit of his wife, Mrs Kwat Tjiong (Burwood Trust). With no disrespect intended, in these reasons I refer to Mr and Mrs Tjiong and the members of their extended family by their first names.
The Burwood Trust provided for George Tjiong (Hok and Kwat’s eldest son) to hold the Unit and its subsequent sale proceeds on trust for Kwat’s benefit during her lifetime and, thereafter, to be applied for the benefit of members of Hok’s family according to their needs. It was…

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 Chang v Tjiong

Details

AGLC: Chang v Tjiong [2022] NSWSC 1092
Case: [2022] NSWSC 1092
Decision Date: 16 August 2022

CaseChat Overview and Summary

The parties involved in this case were Chang, the applicant, and Tjiong, the respondent. The dispute centred on the nature of a discretionary trust and whether it had been determined by payments made by the trustee to a person who was an object of the trust. The case was heard in the Federal Court of Australia. The applicant sought the appointment of independent trustees, arguing that the trust had been determined due to payments made from an account containing both trust and personal funds. The respondent, on the other hand, contended that the payments did not breach the trust and that the trust had not been determined.

The legal issues that the court was required to decide involved the interpretation of trust powers and the determination of a discretionary trust. The primary question was whether the payments made by the trustee constituted a breach of trust and, if so, whether this resulted in the trust being determined. Another issue was whether the mixing of trust and personal funds in the account constituted a breach of trust. The court also had to consider the implications of the trustee's death and the fact that the administrator of his estate was an object of the discretionary trust.

The court found that the payments made by the trustee did not constitute a breach of trust, as they were not made for the personal benefit of the trustee. The court held that the mixing of trust and personal funds in the account did not amount to a breach of trust, as there was no evidence of mismanagement or misappropriation of trust funds. The court concluded that the trust had not been determined, as the payments did not result in the exhaustion of the trust fund or the vesting of the trust property in the trustee. The court also found that the death of the trustee and the appointment of the administrator as an object of the discretionary trust did not affect the validity of the trust. The application for the appointment of independent trustees was dismissed.

The final orders of the court were that the application for the appointment of independent trustees be dismissed, and that the trust remain in the hands of the existing trustee, who was also an object of the discretionary trust. The court did not make any orders regarding the distribution of the trust property, as it found that the trust had not been determined. The case serves as a reminder of the importance of clear and separate accounting for trust and personal funds, as well as the need for trustees to act in the best interests of the beneficiaries.

Orders