Chow v Chow (No 4) [2017] NSWSC 59

Chow v Chow (No 4) [2017] NSWSC 59

The beneficiaries are entitled to require an accounting in common form by the trustees in respect of legal expenses paid from the testamentary trust, without being required to first allege breach of trust. The procedural steps taken by the court were to facilitate the identification of the issues for an efficient and targeted accounting process, and the points of claim as filed by the beneficiaries meet the procedural threshold. The trustees are obligated to provide sufficient evidence to justify legal expense charges when called upon in the accounting process.

Parties
First Plaintiff: Selwyn Sai-Him Chow; Second Plaintiff: Jacqueline Wai Ying Chow; Third Plaintiff: Evan Sai-Yiu Chow; Fourth Plaintiff: Chow Kwok Chi; First Defendant: 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); Second Defendant: Chan Pik Yun Peggy Chow (as co-trustee of the testamentary trust of the residuary estate of Chow Cho Poon)
Jurisdiction
Australia
Judgment Date
10 February 2017
Procedural Posture
Equity Proceedings (application for Accounting in Testamentary Trust) / Procedural Directions; Further Orders to Be Determined at Directions Hearing
Outcome
No final orders; parties directed to consider reasons; further orders to be determined at a directions hearing.
Legal Topics
Equitable Remedies, Accounts and Inquiries, Trustee Accounting, Beneficiaries' Rights, Practice and Procedure, Case Management
Equity Equitable Remedies Accounts and Inquiries Trustee Accounting Beneficiaries' Rights Practice and Procedure Case Management

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Parties

Selwyn Sai-Him Chow

First Plaintiff

Jacqueline Wai Ying Chow

Second Plaintiff

Evan Sai-Yiu Chow

Third Plaintiff

Chow Kwok Chi

Fourth 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

Chan Pik Yun Peggy Chow (as co-trustee of the testamentary trust of the residuary estate of Chow Cho Poon)

Second Defendant

Procedural Posture

Equity Proceedings (application for Accounting in Testamentary Trust) / Procedural Directions; Further Orders to Be Determined at Directions Hearing

Legal Issues

  1. 1 Whether beneficiaries must claim breach of trust to obtain detailed explanation of expenses incurred by trustee
  2. 2 Whether trustees must provide detailed justifications for legal expenses paid from trust funds
  3. 3 Extent of right of trustees not to disclose reasoning process for discretionary powers

Ratio Decidendi

The beneficiaries are entitled to require an accounting in common form by the trustees in respect of legal expenses paid from the testamentary trust, without being required to first allege breach of trust. The procedural steps taken by the court were to facilitate the identification of the issues for an efficient and targeted accounting process, and the points of claim as filed by the beneficiaries meet the procedural threshold. The trustees are obligated to provide sufficient evidence to justify legal expense charges when called upon in the accounting process.

Court Disposition

No final orders; parties directed to consider reasons; further orders to be determined at a directions hearing.