Link 815 Pty Limited as former trustee for the Eternal Moon Trust v Wen

1. [1]

   By motion filed 1 December 2025, the first defendant, Zhaojuan Wen (Ms Wen) seeks an order that the first plaintiff, Link 815 Pty Ltd as former trustee for the Eternal Moon Trust and second plaintiff, New Link 815 Pty Ltd as trustee for Eternal Moon Trust (together, the plaintiffs) provide security for Ms Wen’s costs of the proceedings. The amount of security sought in the motion is $284,120, although the solicitor for Ms Wen contended, in an affidavit made shortly prior to the hearing of the motion, that he had made an error and had understated his estimate, such that the amount of security sought is $308,620. That increase was initially opposed by the plaintiffs, although evidence was ultimately relied on by the plaintiffs at the resumed hearing on the new quantum claimed.

2. [2]

   The motion was heard on 20 February 2026, as part of the Real Property List, but did not (despite my best efforts) complete in the time permitted. The hearing resumed on Wednesday, 25 February 2026. Meher Gaven appeared for Ms Wen and Jennifer Mee appeared for the plaintiffs.

3. [3]

   At the commencement of the hearing on 20 February 2026, I was provided with a helpful court book, which contained the relevant material. Further material was also filed and served between the conclusion of the argument on 20 February 2026 and the resumption of the hearing on 25 February 2026. I summarise all relevant material below.

4. [4]

   In addition, I have had the benefit of written submissions from counsel for each of the parties, and further oral submissions today.

Overview of the proceedings

1. [5]

   The proceedings were commenced by statement of claim filed on 23 January 2025. An amended statement of claim was filed on 20 June 2025. In the amended statement of claim, the primary relief claimed by the plaintiffs is a declaration that the first defendant holds the property comprised in vol X, folio X, being lot X on plan X, known as X Rosevears Drive, Legana, in Tasmania (Property), subject to a resulting trust, or, alternatively, a constructive trust, in favour of the second plaintiff, or, in the alternative, in favour of the first plaintiff, as trustee for the Eternal Moon Trust. Further relief is sought, to the effect that the first defendant transfer to the second plaintiff, or, in the alternative, to the first plaintiff, the full legal title to the Property.

2. [6]

   As is apparent from the relief claimed, the second plaintiff appears to be the current trustee for the Eternal Moon Trust, which was established on 21 March 2017. The first plaintiff was an earlier trustee of the Eternal Moon Trust.

3. [7]

   Various causes of action are alleged in the amended statement of claim, including that each of Ms Wen, Aimee Xiaoping Chen (Ms Chen) (who stands behind the Eternal Moon Trust – being its appointor and sole named beneficiary and a director of the first plaintiff) and the first trustee had a common intention that the Property would be purchased, occupied and used for a particular purpose and would remain an asset of Eternal Moon Trust. A claim in proprietary estoppel is also alleged.

4. [8]

   The amended statement of claim also alleges that, in November 2022, the relationship between Ms Wen and Ms Chen broke down and that, since this breakdown, Ms Wen has refused to, amongst other things, sign any further documents on behalf of the first plaintiff. It appears that this necessitated the incorporation of the second plaintiff and it being made the trustee of the Eternal Moon Trust.

5. [9]

   A defence to the amended statement of claim was filed by Ms Wen on 25 August 2025.

6. [10]

   In addition, on 29 September 2025, Ms Wen filed an amended statement of cross claim, which seeks a variety of relief. The relief claimed does not only extend to the Property the subject of the plaintiffs’ claim, but extends to other properties, which are referred to as the trust property. There is also a claim for relief in the cross claim under the Property (Relationships) Act 1984 (NSW).

Correspondence seeking security and the evidence led on the application

1. [11]

   The affidavit of Ms Wen’s solicitor, Mr Lam, made 27 November 2025 sets out the correspondence between the parties’ respective solicitors leading up to the filing of the motion on 1 December 2025. Mr Lam contends, and I accept, that he has made a number of requests (through the plaintiffs’ lawyers) for information concerning the plaintiffs’ financial position and for information concerning financial arrangements made with what is contended to be a related third party (New Hope Island Limited (New Hope), as trustee for The Little Jacaranda Family Trust), being another trust associated with Ms Chen.

2. [12]

   On 3 April 2025, Mr Lam sent a letter to the plaintiffs’ legal representatives, requesting (among other things) such information and details of a loan provided by Judo Bank, to repay moneys loaned by the Commonwealth Bank of Australia (CBA) for the benefit of the first trustee.

3. [13]

   A response was received on 30 April 2025, but the requested information was not provided. A suggestion was made in this letter that a personal undertaking might be proffered by Ms Chen.

4. [14]

   Thereafter, there was further correspondence, dated 14 May 2025, 22 September 2025, 3 October 2025, 13 November 2025 and 27 November 2025. It is fair to say that no detailed financial information was provided by the plaintiffs to Ms Wen’s lawyers as a result of this correspondence.

5. [15]

   It was against this background of correspondence that the motion was filed on 1 December 2025.

6. [16]

   In his first affidavit, Mr Lam also sets out his estimate of the costs of defending the claim. This is broken down by solicitor’s fees and counsel’s fees.

7. [17]

   Mr Lam also made a further affidavit, dated 19 February 2026, in which he deposed to attempts by the first defendant to obtain financial information by the issuing of notices to produce. It was in this affidavit that Mr Lam made his correction to the quantum of security, as I referred to above.

8. [18]

   Ms Chen, who it was accepted is the person standing behind the Eternal Moon Trust, made an affidavit on 29 January 2026. In that affidavit, Ms Chen referred to the correspondence from her solicitors dated 30 April 2025, in which it was said that an offer was made of a personal undertaking to be liable for any adverse costs orders made against the plaintiffs, on the condition that the first defendant would agree not to bring any application for security for costs. Ms Chen went on to further depose, in paragraph 8:

9. [19]

   Ms Chen then went on in that affidavit to provide some details of her personal financial position. Various properties are identified, with Ms Chen setting out an estimated value, “being based on recent oral advice [she had] received from real estate agents”, together with an assertion as to the outstanding mortgage in respect of each property, so as to derive what she contends is the equity that she has in each of those properties. No supporting information was provided in relation to any of these assertions.

10. [20]

    A similar position was set out in relation to what Ms Chen contended was the financial position of the Eternal Moon Trust. Again, assertions of value were made based “on recent oral advice [she had] received from real estate agents”.

11. [21]

    Ms Chen also went on to provide some detail as to the arrangements between Judo Bank and New Hope. As I understand the position, the moneys which had previously been loaned to the Eternal Moon Trust by the CBA were refinanced, whereby a loan was made by New Hope to the Eternal Moon Trust, which, in turn, was sourced in money borrowed by New Hope from Judo Bank.

12. [22]

    Ms Chen also briefly set out in that affidavit her contention that the quantum of security sought was excessive. However, there was no detailed breakdown as to why the quantum was said to be excessive.

13. [23]

    A further affidavit was made by Ms Chen on 18 February 2026, which stated that, in relation to her personal financial position, other than the mortgage liabilities disclosed in her first affidavit, she did not have any other significant personal liabilities. In relation to the position of the Eternal Moon Trust, Ms Chen confirmed that, insofar as she was aware, neither the first plaintiff nor the second plaintiff has any significant liabilities other than those set out earlier in her affidavit, being the $4.2 million liability owing to New Hope and an outstanding tax liability owing to the Tasmanian State Revenue Office. I observe here, however, that Ms Chen is not a director of the second plaintiff. There was no evidence from any office holder of the second plaintiff on the present motion.

14. [24]

    The evidence relied upon at the further hearing on 25 February 2026, included an affidavit on quantum from the plaintiffs’ solicitor, Mr Ni. Mr Ni deposed to what he contended is the narrow scope of the plaintiffs’ claim versus the broad scope of the cross claim. He also set out why he contends that the past costs figure asserted by Mr Lam was excessive and his opinion as to the likely future costs. This is the first occasion any substantive evidence on quantum had been served in response to Ms Wen’s estimates.

15. [25]

    Mr Lam, in the time available to him since receiving Mr Ni’s affidavit, provided a responsive affidavit dated 25 February 2026. He rightly pointed out that, up until the receipt of Mr Ni’s affidavit, no specific evidence was adduced that took issue of the quantum of security sought. Mr Lam expressed his view as to why the past costs were not excessive, including the work that was carried out prior to the filing of the amended statement of claim. Mr Lam also responded to the allegation made by Mr Ni that the plaintiffs’ claim may relevantly be described as “in narrow scope”, by reference to the matters alleged in the cross claim.

16. [26]

    Perhaps more importantly, Ms Chen also made a further affidavit, dated 24 February 2026. In that affidavit, Ms Chen provided extracts from valuation reports she had received for her personal property real estate from the relevant mortgagees. Ms Chen contended that those mortgagees were initially reluctant to provide her with any written reports and remain unwilling to provide the full reports. She also attached loan statements in relation to each of the properties.

17. [27]

    In relation to her personal financial position, the summary of that, as set out at paragraph 11 of Ms Chen’s recent affidavit, supported as it is by the documents included in exhibit AC1 to that affidavit, is that Ms Chen contends that the total value of her personal real estate portfolio is estimated to be $7,520,000, pursuant to the extracts of the valuation reports, and that the total amount of her outstanding liabilities is $5,436.843.98, deriving remaining equity in her personal real estate portfolio of a little over $2 million.

18. [28]

    A similar position was taken in relation to the financial position of the Eternal Moon Trust. Since the adjourned hearing on 20 February 2026, Ms Chen had apparently requested real estate agents to provide her with their estimated market values, in writing, which she exhibited to her new affidavit. The estimates are in line with the assertions of Ms Chen in her earlier affidavit.

19. [29]

    Ms Chen, through her counsel, also handed up, at the commencement of the resumed hearing, a document setting out the personal undertaking that she would be prepared to provide to the Court. That undertaking was marked MFI 1. Counsel for the plaintiffs made clear that the personal undertaking was only relied upon if necessary; namely, if the Court was satisfied that the jurisdictional requirements had been satisfied, and there were other discretionary factors which warranted the grant of security.

Relevant principles

1. [30]

   The principles in relation to the circumstances in which the Court will order plaintiffs to give security for a defendant’s costs are well understood.

2. [31]

   In the present case, the plaintiffs are corporations. Reliance was placed on both s 1335 of the Corporations Act 2001 (Cth) and r 42.21(d) of the Uniform Civil Procedure Rules 2005 (NSW).

3. [32]

   A suggestion was also made that the plaintiffs were suing for the benefit of another person, so as to invoke UCPR r 42.21(1)(e). I do not accept this contention. As I understand it, the contention focused on the arrangements between New Hope and the Eternal Moon Trust, in circumstances where there was a substantial liability owing by the Eternal Moon Trust to New Hope (which is trustee of another trust associated with Ms Chen – the Little Jacaranda Family Trust). The contention was that this was the only substantial liability of the Eternal Moon Trust and, as such, it is to be inferred that, if the plaintiffs are successful in these proceedings, the proceeds will likely enure to New Hope.

4. [33]

   I do not regard this as sufficient to satisfy the Court that the plaintiffs are suing for the benefit of New Hope: see Upton v TVW Enterprises (1984) 4 FCR 121 at 123. On its face, the plaintiffs appear to be seeking the recovery of what they contend is a trust asset.

5. [34]

   Returning to s 1335(1) of the Corporations Act, it provides that:

6. [35]

   UCPR r 42.21(1)(d) is to similar effect, namely:

7. [36]

   It is clear that these statements lay down a jurisdictional requirement, which if met, enlivens a discretion in the Court to order security. It is also clear that the jurisdictional requirement is an undemanding test, for which the applicant for security bears the onus. In the event that the undemanding jurisdictional requirement is met, the discretion of whether or not to order security is enlivened. It is generally said that the party resisting security bears an onus to establish a reason as to why security should not be granted.

8. [37]

   In the context of the present case, where it is not in dispute that the corporate plaintiffs are trustees, it is worthwhile to recite what was said by Brereton J in Street v Luna Park Sydney Pty Ltd [2006] NSWSC 1317 (Street) at [9]:

9. [38]

   Lest there be any doubt about this principle: see Dal Pont, Law of Costs (5th Ed LexisNexis) at [28.26], and the cases there referred to.

10. [39]

    In the present case, a further additional matter is that, as set out above, Ms Chen has offered a personal undertaking to the Court to pay any costs ordered against the plaintiffs in the proceedings.

11. [40]

    In Vintage Marine Art Pty Ltd v Henderson & Cremer (No 2) (2019) 101 NSWLR 77; [2019] NSWCA 252 (Vintage Marine), Brereton JA (with whom Bell P and Macfarlan JA agreed) stated, in the context of considering the relevance of a personal undertaking in the context of an application for security for costs, as to the reason why an undertaking is relevant (at [23]):

12. [41]

    At [28], Brereton JA stated:

13. [42]

    The authorities were further considered by the Court of Appeal in Suchand Pty Ltd v Colbran and Stone (2024) 115 NSWLR 587; [2024] NSWCA 250 (Suchand), where all members of the Court endorsed what Brereton JA said in Vintage Marine.

14. [43]

    Most recently, in Aversa v Litigation Fund WCX Pty Ltd [2026] NSWCA 2, Leeming JA, stated, at [13]:

15. [44]

    In this last respect, Leeming JA was quoting from Suchand at [74].

Determination

1. [45]

   I deal first with the question of whether the jurisdictional threshold has been crossed. As stated above, it is clear that this is an undemanding test.

2. [46]

   As I understood the submissions of Ms Mee for the plaintiffs, she accepted the principles set out in Street, but contended that, in the facts of this case, I would be satisfied that she has established that the plaintiffs will have recourse to the property or assets held by it on trust.

3. [47]

   It is clear in the present case that clause 36 of the trust deed for the Eternal Moon Trust contains an indemnity in favour of the trustee. The second plaintiff is the current trustee of the Eternal Moon Trust. The first plaintiff is the former trustee of the Eternal Moon Trust. I am prepared to assume that the first plaintiff, as a former trustee, will likely have a right to indemnity out of the trust assets.

4. [48]

   In any event, it appears as though the reason as to why the second plaintiff was incorporated, and some of the assets still remain in the legal name of the first plaintiff, is because of the breakdown in relationship between Ms Chen and Ms Wen, and, if need be, orders will ultimately be made at the end of the case perfecting that all the assets are in the name of the second plaintiff.

5. [49]

   To my mind, the more difficult issue in relation to the threshold requirement is whether there are sufficient assets in the Eternal Moon Trust, such that I would be satisfied that the undemanding threshold test has not been satisfied. In the present case, there are no financial statements for the Eternal Moon Trust. Ms Mee points out that there is no obligation to prepare financial statements. This may be the case, but the fact that no such financial statements have been prepared is a factor that I take into account. Some detail has been belatedly put forward as to the financial position of the Eternal Moon Trust, in terms of its assets, but the attempts that have been made by the first defendant to obtain more detailed evidence has, in large part, been frustrated by the lack of any real documentation being produced.

6. [50]

   Bearing in mind that the threshold requirement is an undemanding one, I am satisfied, in the circumstances of the present case, that the first defendant has satisfied the undemanding test.

7. [51]

   I turn now to consider the discretionary matters relevant to the exercise of an application for security for costs.

8. [52]

   To my mind, the critical discretionary matter in the circumstances of the present case is the personal undertaking that has been offered by Ms Chen, to be liable for the costs of the plaintiffs’ in the proceedings.

9. [53]

   Ms Gaven, for the first defendant, contended that the undertaking was not sufficient in the present case, particularly in light of what may be incomplete information regarding the financial position of the Eternal Moon Trust. Two matters were emphasised. First, that no undertaking has been given by Ms Chen not to encumber any further her asset position. Second, that no undertaking has been given by Ms Chen to the effect that the plaintiffs will have recourse to the trust assets.

10. [54]

    Dealing with the first, no authority was pointed to by Ms Gaven in support of the contention that an individual standing behind the corporate plaintiffs was required to give such an undertaking. The authorities that I have referred to above do not refer to any such undertaking having been given. Indeed, the observations of Brereton JA in Vintage Marine extracted above, refer to an undertaking being a very powerful or determinative consideration, whether or not the undertaking is supported by any assets.

11. [55]

    As for the second matter; namely whether the plaintiffs will have recourse to the assets of the Eternal Moon Trust, I am not satisfied, in the circumstances of the present case, that such an undertaking is necessary. The terms of the trust deed are quite clear.

12. [56]

    Whilst I accept that on the evidence there are some uncertainties in relation to the financial position of the Eternal Moon Trust, and also perhaps some potential irregularities in terms of changes in directorships, and the like, which would cause the Court to be concerned about the financial position of the Eternal Moon Trust, it seems to me that in circumstances where Ms Chen has offered a personal undertaking in the terms that she has, which is to the Court, and in circumstances where there does appear to be some evidence that Ms Chen has some net assets which could be used to satisfy any adverse costs order, the appropriate exercise of the discretion is to accept the personal undertaking and to not otherwise order any additional security. Whilst asset backing of an undertaking may not be necessary, it is present in this case and supports accepting the undertaking with no further security.

13. [57]

    For these reasons, I am satisfied that the Court should accept the personal undertaking offered by Ms Chen and to otherwise dismiss the motion for security for costs.

Quantum

1. [58]

   Lest I be wrong in the conclusion that I have reached above, I turn now to consider the question of quantum of security.

2. [59]

   As set out above, as the position now stands, there is competing evidence from the respective solicitors as to both what should be allowed on account of past costs, and what should be allowed on account of future costs. No application was made to cross examine either of the solicitors. I would have refused any such applications.

3. [60]

   It seems to me, having considered the affidavit evidence from each of the solicitors for the parties, that each was seeking to do their best to assist the Court in expressing their opinions as to what should be allowed on account of past costs, and what should be allowed on account of future costs.

4. [61]

   I am in no real position, on the evidence, to do anything other than reach a compromise between the estimates put forward by the respective solicitors. This is particularly so given that, in determining the quantum of security, the Court adopts a broad-brush approach and any order for security for costs is intended to provide adequate security, rather than complete security.

5. [62]

   Dealing with past costs, Mr Lam’s estimate is approximately $128,000. Mr Ni expresses the view that the majority of those costs were incurred in drafting and amending the cross claim, and that he estimates that no more than 40% of these costs are attributable to the proceedings on the amended statement of claim. A figure of 40% would result in a figure of approximately $50,000 for past costs. The range is, therefore, between $50,000 and $128,000. Had I been satisfied that security should be ordered in addition to, or instead of, the personal undertaking of Ms Chen, I would have allowed a figure of $80,000 in respect of past costs.

6. [63]

   I should also add that I do not regard the delay between the first letter, in April 2025, requesting financial information from the plaintiffs, as a prelude to the making of a security for costs application, and 1 December 2025, when the application was filed, as overly relevant on the question of quantum. The plaintiffs were on notice from an early stage (April 2025) that security for costs was being sought if the plaintiffs could not satisfy the first defendant of their ability to satisfy an adverse costs order.

7. [64]

   Dealing with future costs, the principal area of dispute appears to be what costs should be attributed to the amended cross claim and what costs should be attributed to the amended statement of claim.

8. [65]

   A contention was advanced by Ms Gaven, through Mr Lam, that, in effect, the cross claim was entirely defensive, such that all of the costs associated with the cross claim, or, indeed, at least a large proportion of them, should be allowed by way of security.

9. [66]

   Whilst it is difficult to be precise about this, it appears to me, from an examination of the terms of the amended cross claim, that there are a number of additional allegations that are made in the cross claim, beyond those that are made in the amended statement of claim. They include, for example, claims arising out of the failed domestic relationship between Ms Wen and Ms Chen. It seems to me, therefore, that some allowance should be made on account of costs being incurred only in relation to the cross claim.

10. [67]

    As I understand the figures, Mr Ni’s estimate for future costs is in the order of $135,000. These are solicitor client costs, to which the usual percentage reduction would need to be applied, on account of what would be recoverable on an assessment. Mr Lam’s estimate is substantially higher, being in excess of $200,000.

11. [68]

    Predicting what costs will necessarily be incurred in the future is a difficult exercise. I am also conscious that the amount in issue on the plaintiffs’ claim is not large, in the context of Supreme Court litigation. The Property in question was purchased for something in the order of $500,000. I am conscious that any security that is ordered must be proportionate to the amount at issue in the claim.

12. [69]

    Doing the best that I can on account of future costs, had I been satisfied that security should be ordered, I would have allowed an amount of $100,000 on account of future costs, on the basis that, if this proved to be inadequate, it would be open to the first defendant to make a further application for further security in relation to future costs.

13. [70]

    Had I ordered security, I also would have ordered it in tranches, as requested by the plaintiffs. It is not necessary in these reasons, in light of my primary conclusion, to address what those tranches would have been.

Conclusion

1. [71]

   For the reasons set out above, I have determined that the application for security should be resolved on the basis of the Court accepting the personal undertaking of Ms Chen and otherwise dismissing the motion.

2. [72]

   I will hear the parties on costs.

3. [73]

   The parties were in dispute as to the appropriate costs orders that should be made.

4. [74]

   Ms Gaven, for the first defendant, contended that the primary costs order should be that the plaintiffs pay the first defendant’s costs of the motion, or, in the alternative, that there be no order as to costs.

5. [75]

   Ms Mee contended that the appropriate costs order was that costs be costs in the cause.

6. [76]

   Each party, through their counsel, identified various matters which, it was contended, supported the positions which they contended for.

7. [77]

   In my view, there are factors which point both ways.

8. [78]

   On the one hand, I am concerned about the efforts that the first defendant had to go to to seek to obtain information as to the current financial position not only of the Eternal Moon Trust, but also Ms Chen. This is in the context of a security for costs application against companies that were known to be trustees. It is also against the background of the breakdown in the relationship that appears to be at the heart of these proceedings. It also seems that, until this morning, the undertaking that is proffered by Ms Chen, and has been accepted by the Court, was not put unconditionally.

9. [79]

   Against that, amongst other things, the application today has been pursued by the first defendant, notwithstanding the unconditional undertaking that has been offered by Ms Chen, and accepted by the Court.

10. [80]

    It seems to me, that, in all of the circumstances, the appropriate costs order is that the costs of the motion be costs in the cause. That way, whichever party is ultimately successful in the proceedings, they will have their costs. Accordingly, the order that I make in relation to costs is that the costs of the motion filed 1 December 2025 be costs in the cause.

11. [81]

    The orders of the Court are:

    1. (1)

       The Court notes the undertaking proffered by Ms Aimee Xiaopeng Chen in the form of MFI 1.

    2. (2)

       The Court orders that the plaintiffs cause the undertaking of Ms Chen to be filed with the Court and served on the defendants within seven days.

    3. (3)

       The Court orders that the costs of the motion filed 1 December 2025 be costs in the cause.

    4. (4)

       The Court orders that the notice of motion filed 1 December 2025 be otherwise dismissed.

    5. (5)

       The Court orders that the proceedings be stood over for directions on 6 March 2026, in the Real Property list.

    6. (6)

       The Court orders that the plaintiffs notify the second defendant of these orders and the new listing date.