Chang v Tjiong

HIS HONOUR: The application before the Court is a notice of motion filed by the first defendant seeking orders in relation to a report prepared by the second and third defendants who have been appointed as trustees of a trust described as the “Burwood Trust” and further for leave to issue subpoenas to the trustees and to others seeking production of documents.

The application, at least in part, has its genesis in reasons for judgment delivered by Henry J on 16 August 2022 in respect of proceedings concerning the Burwood Trust: Chang v Tjiong [2022] NSWSC 1092. Her Honour in those reasons dealt with a question as to whether or not the Burwood Trust had been determined by certain payments. Her Honour concluded that it was not so determined.

Her Honour made a number of orders as follows:

Her Honour, pursuant to the orders, appointed Mr Hall and Mr Heesh as trustees of the Burwood Trust. Mr Hall did not continue as a trustee, and he was replaced by Mr Everingham.

On 7 February 2023, Mr Heesh prepared a report which is described as an interim report, and it was reviewed or there was some other input by Mr Everingham.

On 13 February 2023, Mr Heesh and Everingham were made second and third defendants to the proceedings.

On 28 February 2023, there was a listing before Registrar Walton and certain directions were made in relation to that report.

Between 17 March 2023 and 12 May 2023, there were other listings and interlocutory matters, including in relation to a notice to produce.

On the hearing of the notice of motion, I raised with the parties the question of the character of the interim report in light of the fact that the proposed orders did not appear to envisage anything other than a form of final report.

Relevantly, the procedures envisaged by the orders are that:

The orders appear to have further contemplated that there may be certain directions once the report was provided and that then a determination would be made by the Court on questions concerning the corpus, income and any claims for indemnity out of the Burwood Trust funds: Orders 12 and 13.

It appears to me that the orders of the Court did not contemplate the provision of an interim report, nor did they contemplate that there would be opportunity for disputation over any interim report issued.

It appears evident from the interim report that the trustees had a number of queries in relation to their task. This appears at least from the executive summary and other parts of the report.

I am of the view that what ought to have happened is that in respect of any queries that the trustees had on which they considered they should seek the Court’s direction, that, in accordance with Order 11, they should not have issued an interim report but rather invoked the liberty to apply in Order 11 to seek the direction of the Court with respect to the queries, being any matter relating to the report.

It is clear from the terms of Order 11 that the exercise of the liberty to apply (which may be availed of, generally speaking, by the filing of a notice of motion in the proceedings) was to take place prior to the delivery of the report.

It may well be the case that, ultimately, if and when a final report is issued there is disputation by one or more of the parties in relation to it.

However, the process would become unwieldy if interim reports were issued (which, in any event, are not contemplated by the orders) and there was disputation over interim reports even prior to the Court receiving the final report.

For the above reasons, I am of the view that the notice of motion is arguably misconceived, but in any event premature.

I consider what ought to happen is that the trustees should be given an opportunity to formulate questions on which they seek the Court’s direction as contemplated by Order 11 of Henry J’s orders and to avail themselves of the liberty to apply pursuant to Order 11.

I do not propose to be descriptive about how the liberty to apply should be invoked. However, possibilities include the notice of motion setting out questions within the body of the motion or, alternatively, the motion seeking (in the terms of Order 11) the direction of the Court with respect to identified questions set out in a schedule to the motion.

My sense of the matter is that potentially some of the questions of the trustees which appear to be raised within the interim report or embedded in the interim report at various places may well be matters which may be more appropriately dealt with by Henry J.

It is not entirely necessary for me to form any concluded view about that, certainly without seeing questions as formulated. However, it occurs to me that it may be helpful in the first instance that once the trustees have formulated questions and availed themselves of the procedure under Order 11 of the orders that in the first instance the matter ought be listed before Henry J so that her Honour can make an assessment of whether the character of the questions are such that it is appropriate for her Honour to deal with them or whether some other course should be taken.

I raised with the parties the question of the costs of the notice of motion. Following discussion with the legal representatives, I proposed that the costs of the notice of motion be the plaintiff’s costs in the cause. I understood that Mr Barlin (counsel for the plaintiffs) was content with that course and that Mr O’Brien (solicitor for the first defendant) did not or could not say anything in particular against that.

The orders of the Court are as follows: