Legal Research
Cases
Fan v Tang

Fan v Tang

Case [2010] NSWSC 11 28 January 2010

Equitable Compensation

Trusts & Equity

No judgment structure available for this case.

Type to search within this case.

CITATION: Fan v Tang & Ors [2010] NSWSC 11

HEARING DATE(S): 2 September 2009

JUDGMENT DATE :
28 January 2010

JURISDICTION: Equity

JUDGMENT OF: Slattery J at 1

DECISION: See paragraph [103] of judgment

CATCHWORDS: EQUITY - trusts and trustees - liabilities of trustees - proceedings between beneficiaries and trustees - general principles - fiduciary obligations - remedies and procedure - property purchased in name of another but purchase money not provided by that person - no evidence of intention to vest a beneficial interest in the property in the nominal purchaser - second and third defendants hold interests in the property on resulting trust - plaintiff not ordinarily resident in Australia - no contravention of Foreign Acquisitions and Takeovers Act 1975 (Cth) - property acquired by operation of law - exemption under s 12A(6) - second and third defendants encumbered trust property without receiving any corresponding benefits for the trust - second and third defendants breached their duty as trustees not to deal with trust property for their personal benefit and breached their duty of ordinary prudence as trustees - where breaches of trust by several persons contribute to the beneficiary's loss each is liable to pay compensation measured by the amount of loss attributable to their breach - third defendant breached the fiduciary duty he owed the plaintiff not to obtain any authorised benefit from his position as a fiduciary - equitable compensation ordered

LEGISLATION CITED: Corporations Act 2001 (Cth) ss 9, 109X
Foreign Acquisitions and Takeovers Act 1975 (Cth) ss 12, 26A

CATEGORY: Principal judgment

CASES CITED: Barnes v Addy (1874) LR 9 Ch App 244
Breen v Williams (1986) 186 CLR 71
Calverley v Green (1984) 155 CLR 242
Fouche v The Superannuation Fund Abroad (1952) 88 CLR 609
Greater Pacific Investments Pty Limited (in liquidation) v Australian National Industries (1996) 39 NSWLR 143
Herdegen v Federal Commissioner of Taxation (1988) 84 ALR 271
Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41
Jones v Dunkel (1959) 101 CLR 298
Keech v Sandford (1726) 25 ER 223
Keith Henry & Co Pty Limited v Stuart Walker & Co Pty Limited (1958) 100 CLR 342
Manly Council v Byrne (2004) NSWCA 123
Pilmer v Duke & Group Limited (in liquidation) (2001) 207 CLR 165
State Bank of New South Wales v Brown (2001) 38 ACSR 715
Target Holdings Limited v Redferns (A Firm) (1996) AC 421

PARTIES: Plaintiff: Lap Kay Frank Fan
First Defendant: James Chi Kit Tang
Second Defendant: JV Capital Pty Limited
Third Defendant: Vicky Lai Ki Yang

FILE NUMBER(S): SC 1675/08

COUNSEL: Plaintiff: Mr S Nixon
Defendants: No appearance

SOLICITORS: Plaintiff: McCullough Robertson Lawyers
Defendants: No appearance

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

SLATTERY J

THURSDAY 28 JANUARY 2010

1675/08 LAP KAY FRANK FAN v JAMES CHI KIT TANG; JV CAPITAL PTY LIMITED & VICKY LAI KI YANG

JUDGMENT

1 HIS HONOUR: A trusted friend acting in the role of investment manager can himself become a…

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 Fan v Tang

Details

AGLC: Fan v Tang [2010] NSWSC 11
Case: [2010] NSWSC 11
Decision Date: 28 January 2010

CaseChat Overview and Summary

In the matter of Fan v Tang, the Federal Court of Australia was presented with a dispute concerning the fiduciary duties of trustees and the resulting liabilities arising from their breaches. The plaintiff, Fan, brought proceedings against Tang and others, the defendants, who were trustees of a trust. The crux of the dispute involved allegations that the trustees had improperly used trust property for personal benefit, leading to financial loss for the plaintiff.

The legal issues that the court was required to address included the determination of whether the trustees had breached their fiduciary duties by dealing with trust property for personal gain. Another issue was whether the plaintiff was entitled to compensation for the losses caused by the trustees' breaches, and if so, to what extent each trustee was liable for the losses. Additionally, the court had to consider whether the acquisition of the property by the trustees complied with the Foreign Acquisitions and Takeovers Act 1975 (Cth) and whether it was subject to any exemptions.

The court's reasoning established that the second and third defendants held interests in the property on a resulting trust for the trust, as there was no evidence that they intended to vest a beneficial interest in the nominal purchaser. The trustees had encumbered the trust property without receiving any corresponding benefits, thereby breaching their duty as trustees not to deal with trust property for personal benefit. The court found that the third defendant also breached the fiduciary duty he owed the plaintiff by obtaining an unauthorised benefit from his position as a fiduciary. The court held that where breaches by several persons contribute to the beneficiary's loss, each is liable to pay compensation measured by the amount of loss attributable to their breach. The court ordered equitable compensation to be paid to the plaintiff for the losses attributable to the trustees' breaches.

Orders