Supreme Court
New South Wales
Medium Neutral Citation: Chow v Chow (No 4) [2017] NSWSC 59 Hearing dates: 8 December 2016 Decision date: 10 February 2017 Jurisdiction: Equity Before: Robb J Decision: Parties to consider these reasons with appropriate orders to be determined at a directions hearing
Catchwords: EQUITY – Equitable remedies – Accounts and inquiries – Accounting in equity – Orders sought by beneficiaries of testamentary trust that trustees account for legal expenses of trust – Whether beneficiaries acted reasonably – Whether beneficiaries must claim breach of trust to obtain detailed explanation of expenses incurred by trustee – Extent of right of trustee not to disclose reasoning process and reasons for exercising discretionary powers
PRACTICE AND PROCEDURE – Case management – Application for accounting in equity – Where beneficiaries may be entitled to a full accounting – Extent to which court can direct parties to adopt efficient and cost effective means of satisfying right to an accountingLegislation Cited: Supreme Court Rules 1970 (NSW) Pt 78
Uniform Civil Procedure Rules 2005 (NSW) rr 13.4, 46.7, 49.19Cases Cited: AIT Investment Group Pty Ltd v Markham Property Fund No 2 Pty Ltd [2015] NSWSC 216
Avanes v Marshall (2007) 68 NSWLR 595; [2007] NSWSC 191
Chow v Chow (No 2) [2016] NSWSC 994
Chow v Chow (No 3) [2016] NSWSC 1156
Chow v Chow [2016] NSWSC 908
Deutsch v Trumble [2016] VSC 263
Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405Texts Cited: Ritchie’s Uniform Civil Procedure NSW Category: Procedural and other rulings Parties: Selwyn Sai-Him Chow (first plaintiff)
Chow Kwork Ching (as executor of the estate of Chow Cho Poon & co-trustee of the testamentary trust of the residuary estate of Chow Cho Poon) (first defendant)
Jacqueline Wai Ying Chow (second plaintiff)
Evan Sai-Yiu Chow (third plaintiff)
Chow Kwok Chi (fourth plaintiff)
Chan Pik Yun Peggy Chow (as co-trustee of the testamentary trust of the residuary estate of Chow Cho Poon) (second defendant)Representation: Counsel: PH Blackburn-Hart SC/DM Tucker
Solicitors: Arnold Bloch Leibler (plaintiffs)
M Walton SC/MW Sneddon (defendants)
Minter Ellison (defendants)
File Number(s): 13/190172 Publication restriction: None
Judgment
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This is the fourth procedural judgment I have given in these proceedings.
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By summons filed on 21 June 2013 in the General List, a number of beneficiaries of the will of the late Chow Cho Poon commenced proceedings against the defendants, who are the executors, and trustees of the testamentary trust of the residuary estate of the deceased. As in the first judgment, which is Chow v Chow [2016] NSWSC 908, I will refer to the plaintiffs as the “beneficiaries”, and to the defendants as the “trustees”. The beneficiaries sought relief to enforce their rights under the testamentary trust, and also, by order 1, sought an order that the trustees account for their administration of the estate.
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The application by the beneficiaries for an order that the trustees account for their administration of the estate in Equity remains outstanding.
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On 14 February 2014, when the court…
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- Chow v Chow (No 4) [2017] NSWSC 59
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- [2017] NSWSC 59
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CaseChat Overview and Summary
The court was required to determine whether the beneficiaries had acted reasonably in seeking the accounting, and if they were entitled to a full accounting without having to prove a breach of trust. Additionally, the court needed to assess the extent to which a trustee could withhold disclosure of their reasoning process and the reasons for exercising discretionary powers. The court also considered the principles of case management and whether it could direct the parties to use efficient and cost-effective means to satisfy the right to an accounting.
The court held that the beneficiaries were entitled to an accounting to the extent that they had acted reasonably in making their application. It was found that the beneficiaries were not required to prove a breach of trust in order to obtain a detailed explanation of the expenses incurred by the trustees. The court emphasised that while trustees had a right to exercise their discretion in managing trust assets, this did not extend to a right to withhold information about their decision-making process without justification. The court also noted that case management principles required the parties to adopt efficient and cost-effective means of satisfying the right to an accounting, which included using technology and other resources to facilitate the process.
The court ordered that the trustees provide a detailed accounting of the legal expenses incurred by the trust, specifying the costs associated with each matter, and the reasoning behind the decisions to incur those expenses. The court also directed the parties to use technology and other resources to facilitate the accounting process in an efficient and cost-effective manner.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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