Du Ling Trustee Limited v An

[2017] NZHC 1938

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV 2017-404-000225

[2017] NZHC 1938

BETWEEN

DU LING TRUSTEE LIMITED AS

TRUSTEE OF THE DU LING FAMILY TRUST

Plaintiff

AND

CHAO AN

First Defendant

AND

ALL IN ONE ASSET MANAGEMENT LIMITED

Second Defendant

Hearing:

15 June 2017

(And following receipt of further submissions in July as to admissibility of evidence)

Appearances:

R B Hucker for the Plaintiff

R Reed/A Manuson for the First Defendant J Strauss for the Second Defendant

Judgment:

17 August 2017

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

17.08.17 at 10:30am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

DU LING TRUSTEE LIMITED AS TRUSTEE OF THE DU LING FAMILY TRUST v C AN AND ALL IN ONE ASSET MANAGEMENT LIMITED [2017] NZHC 1938 [17 August 2017]

The application

[1]    The plaintiff as trustee of the Du Ling Family Trust (the trust) applies for summary judgment upon its proceeding to recover $744,000 it says was wrongfully taken by the first defendant (Mr An), Ms Du’s former husband, from the trust including

$440,000 which she says he used to purchase a shareholding in the second defendant company (All In One).

The claim

[2]    The claim is supported by the affidavits filed by or on behalf of Ms Du and Mr An. Issue was taken with the admissibility of Ms Du’s affidavit. Mr Strauss for All  In One submitted that Ms Du’s affidavit filed in support, was not in the correct form, as HCR 12.4(4)(a) required. Her affidavit was in English yet she claimed she neither speaks nor understands English.

[3]    After a consideration of submissions by counsel the Court ruled that it was uneasy about accepting a process by which a person is deposing to the truth of a document in a language which she herself cannot read and understand.

[4]    In the circumstances the Court agreed to give Ms Du an opportunity to file an affidavit in substitution for that previously filed.

[5]    On 20 July 2017 an affidavit of Jun Shi was filed. He deposed he was a freelance interpreter and translator specialising in interpreting and translating from both English to Mandarin and Mandarin to English languages.

[6]    Mr Jun has a Bachelor of Business Studies from Massey University in 2003 and a Graduate Diploma in Interpreting Studies (Legal and Medical) from Auckland University of Technology in 2015. Mr Jun deposes having worked in the interpreting and translation field for approximately three years and he became a full member of NZSTI (New Zealand Society of Translation and Interpreting) in March 2016.

[7]    He deposes having previously prepared translations from Mandarin into English for High Court civil proceedings. He confirmed having read both the

Mandarin language affidavit of Ms Du sworn in support of her current summary judgment application, and the Mandarin language affidavit which Ms Du swore in reply. He confirms having prepared English translations for both Mandarin affidavits.

[8]    On behalf of All In One Mr Strauss submits the affidavits recently supplied are not proper affidavits in support of the application. Counsel submits there is a big question mark over the value of an affidavit prepared by a solicitor and then sworn by the deponent as opposed to evidence given by the deponent.

[9]    A memorandum on behalf of the first defendant supports that position and notes the translator content in English is the same as provided by the plaintiff’s previous affidavit. Also counsel indicates concerns that the translator has simply translated the original English affidavit to Mandarin, the contents of which Ms Du has confirmed.

[10]In the Court’s view there has been sufficient compliance with Rule 1.15 HCR.

[11]   There can be no foundation to the allegation that the interpreter has simply sworn an affidavit that is untrue. Nor does it appear there is any basis for the Court to go behind the affidavit of the interpreter or to allege that the document is other than a proper translation.

Ms Du’s case

[12]   Ms Du is the sole trustee of the trust which was settled by a deed of trust dated 26 November 2015, by Ms Du and Mr An.

[13]   The plaintiff was the registered proprietor of the Oak Terrace property and an Inkster Street property in Auckland. The plaintiff pleads the Inkster Street property was originally purchased in 2011, in the name of Mr An, utilising funds that had been provided she says, from another property of hers. The Oak Terrace property was purchased by the trust in 2014 and was also registered in the name of Mr An. The trust was formed on 2 November 2015. The plaintiff was incorporated on 10 December 2015.

[14]   Mr An was authorised to complete transactions on the trust’s bank accounts. On January 2016 Mr An submitted a mortgage application form on behalf of the plaintiff to raise mortgage finance against the Inkster Street property and the Oak Terrace property on behalf of Ms Du. Ms Du said she never completed any application for a further loan even though a document bearing her signature was subsequently produced by the ANZ Bank.

[15]   On 26 January 2016 the ANZ Bank entered into a facility agreement with the trust in the amount of $1,191,000 to assist with the purchase of the Inkster Street property, using both the Oak Terrace and the Inkster Street properties as security. On 29 January 2016 the trust acquired the Inkster Street property from Mr An utilising a ANZ Bank loan for $1,191,000. Ms Du signed the loan documents as a trustee. She says she has no recollection of signing the documents or for which purpose they were signed.

[16]   Ms Du says she cannot speak nor understand English and at all material times was unaware that the mortgages were being raised against the Oak Terrace and Inkster Street properties and that Mr An had transferred the Inkster Street property from himself to the trust utilising the funds of the trust.

[17]   Ms Du claims that on 8 December 2016, and without her knowledge, Mr An directed the ANZ Bank to make two payments each of $150,000 from the trust’s bank account into bank accounts bearing his name only.

[18]Ms Du further claims:

(a)On 29 January 2016 and without her knowledge, Mr An directed the ANZ Bank to make payment from the account of the trust to the account of All In One in the amount of $440,000 causing the account of the trust with the ANZ Bank to become overdrawn in the amount of $438,950; and

(b)On 23 February 2016 and again without her knowledge Mr An arranged a home loan from ANZ Bank in the sum of $440,000 using the trust

properties as security, and directed the bank to transfer the loan proceeds into the account of the trust to clear the overdrawn account of Ms Du.

[19]   It is pleaded Mr An is a 40 per cent shareholder in All In One and that company owns a property at Hobson Street, Auckland. It is claimed those funds paid from the trust by Mr An on 29 January 2016 (i.e. $440,000), and for which he on or about 23 February 2016 arranged for a ANZ home loan using the trust properties as security, in order to replace those funds earlier paid to All In One, were used by Mr An to acquire a personal interest in All In One and in turn the property at Hobson Street.

[20]   For Ms Du it is claimed the transfer of those funds were not utilised for the purposes of the trust and nor did she authorise the transfer of those funds.

[21]   On 1 December 2016 Mr An lodged caveats against the trust properties at Oak Terrace and Inkster Street maintaining a claim under the Property (Relationships) Act 1976.

[22]   Ms Du says she has entered into a sale and purchase agreement for an Epsom property and has paid a 10 per cent deposit of $270,500. She says however that because of those caveats lodged over the trust properties, she is unable to raise the finance to settle the purchase of that Epsom property.

[23]Ms Du seeks a declaration that:

(a)Mr An’s interest in All In One is because of a resulting or constructive trust requiring him to account to Ms Du for monies wrongfully transferred from the trust to All In One; and Mr An’s shares in All In One are held for the benefit of Ms Du.

(b)That he holds those sums totalling $300,000 paid from Ms Du’s bank account into his bank accounts on a constructive resulting trust in favour of Ms Du.

[24]   In the alternative it is pleaded that by Mr An’s actions and conduct he has committed the tort of conversion by transferring those monies to himself.

[25]   Against All In One it is claimed that company through its directors knew or ought to have known those funds received were not from the account of Mr An but were from the Ms Du’s trust account, and therefore All In One has knowingly assisted in the breach of trust committed by Mr An, and therefore holds those shares on a resulting or constructive trust in favour of Ms Du and therefore is liable to pay

$440,000 to Ms Du.

A summary of Ms Du’s evidence

[26]   Ms Du says she and Mr An were married for nine years until 29 April 2016. He was a mortgage broker. They emigrated from China under the investor category. She said she provided the funds to purchase the Oak Terrace property prior to leaving for New Zealand. Part of those funds were she said transferred by her to Mr An’s account. She said funds were also transferred to relatives in China who then deposited them into the account of Mr An. This was done because of restrictions on transferring monies out of China.

[27]This exercise was she says repeated to purchase the Inkster Street property.

[28]   She said Mr An was the principal applicant under the investor category for permanent residence in New Zealand, and Ms Du was granted permanent residency as an accompanying person. She said she provided the funds to Mr An to acquire both properties. She says in late 2015 Mr An arranged for his solicitors to prepare documents that she has subsequently become aware were trust documents, and those showed her appointment as a trustee of a family trust. She was not, she says, aware that there were mortgages over the Oak Terrace or Inkster Street properties. She said Mr An’s lawyers completed the paperwork that was put in front of her to sign. No arrangement was made for independent lawyers to be appointed to assist. She says it appears her trust acquired the properties by raising a mortgage over them and making payment to Mr An to acquire those properties notwithstanding he had used the money she originally provided towards the purchase of those properties.

[29]   Ms Du does not recall signing any mortgage applications. She says the signature against her name on those documents was not hers.

[30]   She and Mr An had discussed his interest in the Hobson Street property investment in or around November 2015. She said she did not agree to the investment. When later she was aware he had purchased an interest in that property she said he told her it had been paid for entirely by a loan to All In One. Her enquiries later with the ANZ Bank confirmed that on 29 January 2016, Mr An requested funds from the trust to be transferred to All In One, which he had an interest in, and the amount in question was $440,000. Later the ANZ Bank provided All In One with a home loan drawn in that same amount which was used to repay the $440,000 taken from the trust’s bank account. Ms Du says she did not authorise these transactions.

[31]   Ms Du said she only became aware that there were mortgages on the Oak Terrace and Inkster Street properties when she recently entered into a sale and purchase agreement for an Epsom property, to be closer to a school her daughter was to attend.

[32]   On 20 December 2016 Ms Du instructed her solicitors to seek repayment of those funds transferred All In One. In the course of those investigations she became aware that on 8 December 2016 $300,000 had been transferred from the trust’s bank account into Mr An’s personal bank account.

[33]   In all she claims to be due a repayment of $740,000 which she needs to complete her purchase of the Epsom property.

Notice of opposition and Mr An’s evidence

[34]   Mr An’s position is that all these issues properly fall under the Property (Relationships) Act 1976 and in respect of which the High Court has no jurisdiction in the first instance.

[35]   Ms Du and Mr An were married on 16 January 2007 and on 13 May 2016 around the time of their separation they entered into a private agreement drafted by Mr Du showing how the relationship properties were to be divided.

[36]   Mr An asserts that during their relationship they jointly acquired the Oak Terrace and Inkster Street properties and as well the shares in All In One which owns the Hobson Street property, even though those were acquired solely in his name.

[37]   Mr An asserts mortgages were registered over the Inkster Street and Oak Terrace properties when those were first purchased in 2011 and 2014. He says those properties are relationship property.

[38]   The trust, set up in November 2015 acquired the main relationship assets of Ms Du and Mr An being the Oak Terrace and Inkster Street properties. If that disposition of those properties to the trust has the effect of defeating Mr An’s claim under the Property (Relationships) Act 1976 then he will lodge a claim pursuant to  ss 44 and 44C either for the disposition to be set aside or for compensation to be paid.

[39]   It is submitted on behalf of Mr An that ownership of those funds must be determined under the Property (Relationships) Act 1976 before any claims of resulting/constructive trust, conversion, and dishonest assistance can proceed.

[40]   Mr An deposes that he and Ms Du are still legally married. He was the one responsible for managing their relationship properties and investments and Ms Du accepted that.

[41]   He came to New Zealand in 2011 and purchased the Inkster Street property (not then the Oak Terrace property as Ms Du claims) with funds from their relationship savings in China and also from a loan from a Chinese bank. That property was settled in his name. After they succeeded with their application under the investor category for residency in New Zealand they started to transfer funds to New Zealand to satisfy immigration requirements and to buy the Oak Terrace property which was nearby the school they wished to enrol their children at.

[42]   The Oak Terrace property was likewise settled in his name solely because he declared his income for the purposes of the mortgage application. Mr An says that after moving into the Oak Terrace property Ms Du wanted to separate. He did not want that as their daughter was 5 years old and their son was 3 years old at the time.

[43]   He said Ms Du asked him to sign an agreement that she had prepared for both of them to see a therapist. He signed that because he said it was best for their relationship and the children. That agreement provided that the parties would divide their family assets and that Mr An would own 15 per cent and Ms Du 85 per cent of those assets and that he would agree to a transfer of his interests prior to April 2017. It also noted Mr An would pay 30 per cent of his income for the children’s education and other major expenses.

[44]   Mr An said they did not separate after they signed that agreement because he wanted to start a business and that was when the All In One company was set up; and because of this business endeavour they wanted to protect the financial interests of the family and they then agreed to set up a family trust. He said they went to see Mr Chen a lawyer. Later by email dated 24 April 2015 Mr Chen confirmed his instructions from them to establish a family trust for the purpose of their asset protection and to have the Oak Terrace and Inkster properties, presently in the name of Mr An, to be put into the family trust by gifting. Mr Chen noted that for the purpose of establishing the family trust forms were included requesting all the details to be provided.

[45]   Mr An says Mr Chen was fluent in Chinese and that Ms Du had contacted Mr Chen on a number of occasions before they went to see him together. He said it had been intended that both of them would be trustees of the trust but later Ms Du insisted on being the sole trustee – which he agreed to.

[46]   He says the mortgage on Inkster Street had been refinanced from the Chinese Bank HSBC to the ASB Bank in 2015 and when it was transferred into the trust he decided it would be easier to use the same bank i.e. the ANZ Bank to provide finance for the Oak Terrace property purchase. He said the ANZ Bank consented to the mortgages being in the name of the trust provided he was the guarantor of the loans.

He said he was made a nominated signatory of the trust bank account so that he could continue his responsibility of managing the relationship properties.

[47]   He set up and invested in All In One together with others to purchase the Hobson Street property. He says there was no question but that his interest in the shares of All In One is relationship property.

[48]   He says in early 2016 he discovered Ms Du was having an affair but for the sake of the children he did not make this a big issue. In May 2016 she asked him to sign a divorce agreement that she had prepared by which she would get all of the properties and $300,000 cash. The relationship property specified included the Oak Terrace and Inkster Street properties worth $3M, his shares in All In One worth over

$440,000, and New Zealand bonds with a value of $1.5M. He said they also had cash in the sum of $570,000.

[49]   Mr An said he thought that if he signed the agreement giving relationship property to her, that “we could keep peace in the family”. After they both signed it he said Ms Du gave him $130,000 of the cash they had and she kept the rest. She then travelled overseas, he believes, with her boyfriend. He said she spent approximately

$70,000 on that trip. He was concerned about this and withdrew two amounts in the sum of $150,000 on 8 December 2016 from the home loan account to ensure that daily expenses, children’s education fees and credit card expenses, were met.

[50]   He has since taken legal advice and understands now that the set up of the trust defeats claims under the Property (Relationships) Act 1976. He has lodged claims on the Oak Terrace and Inkster Street properties under the Act. He believes Ms Du’s purchase of the Epsom property was for her to move in with her new boyfriend and that she paid the deposit of $270,500 from their relationship funds without his consent.

[51]   Mr An confirms that the mortgages on the Inkster Street and Oak Terrace properties were registered when the properties were first purchased and before they were transferred into the trust. The application for a mortgage was only to refinance the mortgage against Inkster Street from the ASB Bank to the ANZ Bank.

[52]   Contrary to Ms Du’s claim otherwise, Mr An says Ms Du can speak and understand English and that she initialled 20 pages of the loan agreement with ANZ Bank personally as a director of the trust.

[53]   Mr An says Ms Du was fully aware of the $440,000 investment in All In One since at least May 2016, and that a beneficial interest in that also belonged to her.

[54]   He believes the Inkster Street and Oak Terrace properties belong to them both and that the trust was set up to protect their financial interests. Only now does he understand that the trust legally removes his control over the properties. He says this was not intended and that he continues to manage those as relationship property as he has done so for many years.

Review summary

[55]   Mr An’s position is that their issues ought to be the subject of Property (Relationships) Act 1976 proceedings. Mr Hucker for Ms Du submits that the trust’s proceeding does not attempt to divide relationship property which is a separate issue to be resolved. There is he says no contemporaneous documentation suggesting Mr An was to be a signatory on the account of Ms Du and, that there is no suggestion there was a distribution to Mr An as a discretionary beneficiary of the trust. Mr Hucker submits All In One acknowledged or was wilfully blind to the source of funds for Mr An’s subscription shares.

Legal principles

[56]   If summary judgment is to be granted the Court must be left without any real doubt or uncertainty concerning the plaintiff’s claim. A plaintiff has the task of showing there is no defence.1 The Court will not normally resolve material conflicts

1 Eng Mee Yong v Letchumanan [1980] AC 331 P.C.

of evidence but should not accept uncritically evidence inherently lacking in credibility.2

[57]The Court may take a robust and realistic approach where the facts warrant it.3

Considerations

[58]   Mr Hucker submits there is no division of relationship property that arises as a result of the proceeding. Rather Ms Du seeks to recover monies she says has been misappropriated and to which Mr An had no entitlement. The fact that the trust property may be subject to a future claim does not prevent recovery. Therefore s 4(4) of the Property (Relationships) Act 1976 has no application to this proceeding for rights under that Act do not constitute existing equitable estates or interests in property. Also any property rights do not exist until an order of the Court in relationship property proceedings has been made or the parties have reached an agreement. Therefore and until that happens each party is free to enforce its rights under conventional property principles. Mr Hucker submits that an order for return of misappropriated funds would not affect the ability of the Family Court to make orders regarding the status and division of relationship property.

[59]   Mr Hucker submits Ms Du and Mr An created the trust as a separate entity, distinct from themselves. Ms Du is, counsel submits, under a positive obligation to protect trust assets and a failure to do this will likely be a breach of trustee duties. Also the Act specifically preserves the law relating to trustee’s obligations pursuant to s 4(B). That section appears to confirm that the Act cannot cut across a person’s rights, obligations and duties when acting in their capacity as a trustee.

[60]   The first cause of action asserts Mr An holds the funds he appropriated from the trust account on a resulting or constructive trust in favour of Ms Du because there was no exercise of a trustee power that entitled Mr An to those funds that Mr An was not a trustee but even if he had been he would have had a duty to execute the trust in accordance with its terms and a duty of loyalty and to preserve trust property. Instead

2 Pemberton v Chappells [1987] 1 NZLR 1.

3 Piblie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).

it is claimed Mr An used these funds for non trust purposes. He has, it is claimed, knowingly obtained trust property in breach of trust or alternatively has meddled in trust property and has not applied those in accordance with the trust deed but instead has used them to acquire property for his own benefit. There is evidence Mr Hucker submits from a forensic expert indicating that Ms Du’s signature on the banking mandate and the mortgage application form may have been forged.

[61]   There is, counsel submits, no evidence to indicate by his purchase of shares that Mr An intended to confer any beneficial interest to the trust in those shares purchased in All In One.

[62]   The plaintiff’s claim of conversion is about recovering money from that person or entity that has received it from Ms Du when there was no intention on her part to transfer that to the recipient. Mr Hucker submits in the present case the recipients are the defendants and the cause of action is completed upon receipt of the money. It matters not submits Mr Hucker that Mr An’s justifications for withdrawing funds are immaterial to a cause of action in which money had and received has been made out. Further and as counsel notes Mr An does not allege Ms Du was aware of or directly authorised the transfer of funds to All In One.

[63]   The claim of knowing assistance against All In One concerns a person who dishonestly assists another’s breach of trust, whether or not those funds have been misapplied because a stranger to a trust will be treated as a constructive trustee and be found liable to account if that person knowingly assisted in the dishonest fraudulent design to misapply trust funds. Mr An was a shareholder of All In One and the nature of that relationship, submits Mr Hucker, clearly implies knowledge by All in One of the circumstances by which Mr An obtained the funds for investment in his company.

[64]   Noting that the Court has a residual discretion to decline summary judgment, Mr Hucker submits this is not the sort of case where the use of summary judgment may result in some injustice. Also, a proceeding has been commenced in respect of the relationship’s remaining assets. Case authority does not, he submits, stand for a principle that where there is a property dispute between spouses relating to alleged relationship property, the Court must decline to grant summary judgment.

Conclusions

[65]   Ms Du’s account of all factual considerations is, the Court considers, far from being clear by the evidence she has provided.

[66]   Also it is clear that Ms Du’s recall of events effecting the purchase of the Oak Terrace and Inkster Street properties is not correct. It was not the Oak Street property that was first purchased. Also the Hobson Street property was acquired by All In One before the trust was set up. Ms Du claims having no knowledge of the acquisition of this property.

[67]   The trust was set up by a lawyer Mr Chen who apparently acted for both Ms Du and Mr An. Ms Du gives evidence now that she never intended to create the trust, and Mr An now gives evidence he was not advised about the legal consequences of the trust, particularly in not becoming a trustee himself.

[68]   The properties in question were transferred to the trust by Mr An without him receiving any consideration for those. The evidence does not suggest anything improper regarding mortgage arrangements undertaken when the title to those properties were reregistered in the name of Ms Du’s trust.

[69]   There is a clear denial of Ms Du’s claims of signature forgery. Mr An says Ms Du’s signature was fixed on those documents electronically and with her authority. Ms Du denies having an electronic signature but that denial should be viewed in the context where she said did not authorise for there to be any mortgage over the properties, but she signed a home loan contract with ANZ when Mr Chen was her witness.

[70]   Ms Reed for Mr An submits the forensic document expert did not find that the signature on the home loan contract is unlikely to be that of Ms Du’s. Why then, Ms Reed asks, did she sign a home loan contract with ANZ Bank if she did not authorise for there to be mortgages over the properties. Also the clear evidence is that Mr An was the guarantor of the home loan as the bank would only allow the mortgages to be in the name of the trust if he was the guarantor.

[71]   The parties disagree regarding who prepared the divorce agreement in Chinese by which Ms Du would receive all relationship property (purported to be valued at about $5.5M) save for $300,000 in cash. That document signed in May 2016 clearly refers to Mr An’s shareholding in All In One. It seems Ms An was aware of the existence of that asset more than a year before.

[72]   The parties are in disagreement about when it was that they separated. It is submitted for Ms Du this occurred in January 2015. The Court is informed that in a parenting proceeding before the Family Court Ms Du deposed that the separation agreement was made in May 2016.

[73]   There are a number of significant matters including important facts upon which the parties disagree.

[74]   What is clear in this case is that the property transferred to the trust was formerly relationship property. When the trust was created Mr An said he expected to be a trustee but agreed he would not. He deposes having not understood how that would affect his interest in that property in the trust; that no issue was taken by his effective control of the trust thereafter until Ms Du recently purchased the Epsom property and professed to finding out that there were funds taken which she did not authorise. Yet, it is clear by the parties’ earlier agreement in May 2015 that she was aware of the shareholding in All In One.

[75]   The important issue upon Ms Du’s proceeding is proof of claims of a specific intention to defeat her rights to trust property. In this case the properties in question had been registered in Mr An’s name before registration was transferred to the trust. It may be, the Court considers, that the evidence of the lawyer involved Mr Chen, would likely be of assistance here. It is curious that in the circumstances that separate lawyers were not engaged as the evidence indicates the parties’ relationship was not a stable one.

[76]   Counsel for Mr An says a relationship property application will be initiated under the Property (Relationships) Act 1976 in conjunction with which an application

under s 40 of the Property (Relationships) Act 1976 will be filed to set aside the disposition of relationship property to the trust.

[77]   It is curious that Ms Du relies on terms of a trust written in a language she does not understand. Mr An provides evidence about not having understood how his legal position would be affected by signing that trust document.

[78]   It is the plaintiff’s case that there were no trust resolutions detailing any authority given to the first defendant to deal with the ANZ Bank. However the trust deed did not require such.

[79]   Counsel for Mr An submits the evidence provided by Ms Du raises more questions than it resolves. The Court agrees with that observation.

[80]   Of importance to this case is the Court’s view that it cannot be found that Mr An did not have authority to operate the trusts and/or to use the funds to acquire the interest he did in All In One.

[81]   Ms Du and Mr An were the settlors of the trust and they retained the power to appoint and remove discretionary beneficiaries and trustees. Clause 2 of the memorandum of wishes recorded that the trust had been set up:

For the general purpose of ensuring that (their) family’s wealth is owned through one coherent ownership vehicle and to ensure that members of (their) family are able to benefit from the capital and income of the trust from time to time.

[82]   As Mr Strauss for the second defendant comments, the trust was established just before All In One was established and according to Mr An the new business venture prompted the decision to establish the trust to protect the family’s financial interests – and Ms Du does not challenge this account.

[83]   When the properties were acquired Ms Du and Mr An were married. Those were registered in Mr An’s name and were mortgaged at the time they were acquired. There can be no issue but that those were then relationship property.

[84]   Over a period of about three months from the time the trust was created two properties were transferred to the trust, All In One was incorporated which then purchased the Hobson Street property, and Mr An acquired an interest in All In One.

[85]   The financing of all of these is interrelated. It is not clear from available evidence about how those transactions relate to relationship property. Mr An claims his holding in All In One is relationship property. Later their “divorce” agreement dated 13 May 2016 refers to relationship property as including shares in All In One.

[86]   The Court accepts the submission of Mr Strauss that no distinction is made in that agreement between relationship and trust property which is consistent with how the parties conducted their financial affairs. The setting up of the trust therefore and those transactions is not inconsistent with Mr An’s version of the events. Nor has Ms Du offered any explanation for why Mr An would have transferred the two properties to the trust and assume personal liability for the trust’s liabilities to the ANZ Bank.

[87]   If in May 2016 Ms Du completed an agreement listing an interest in All In One as relationship property how is it then that she can now contend that Mr An had not been authorised to use the funds for that purpose.

[88]   Notwithstanding Mr Hucker’s submissions for this matter to be considered in isolation from relationship property rights this Court is of the view that the underlying issues in the present proceeding appear to be essentially about relationship property.

[89]   Whether right or wrong in that regard, the Court is of the view that this is not an appropriate case to grant summary judgment. There is no reliable evidence to support claims of dissipation of trust assets, or of the circumstances obliging Ms Du to assume trustee obligations.

[90]   There are many factual differences that cannot be resolved by the affidavit evidence. Ms Du’s claims of misleading conduct by Mr An are not supported. The trust deed is possibly open to challenge and the Court considers any such proceeding ought to be filed and served promptly.

[91]   The Court also considers it appropriate for Mr An to provide an undertaking to retain the shares in All In One and to ensure their value is not adversely affected meanwhile.

[92]   If requested the Court will convene a telephone conference to discuss how these matters ought to be addressed.

Result

[93]The summary judgment application is dismissed.

[94]   Costs are reserved for determination upon application made in due course, once Mr An’s Family Court proceeding has been filed.

Associate Judge Christiansen