Chang v Tjiong (No 2) [2024] NSWSC 74

Chang v Tjiong (No 2) [2024] NSWSC 74

The value of the Burwood Trust corpus should be determined by tracing the relevant trust funds and sale proceeds through subsequent transactions consistent with accepted equitable tracing principles (Re Hallett's Estate), applying agreed compound interest, but excluding notional rent and notional tax discounts. Katrina, though a bare trustee after 16 June 2009, is only entitled to indemnity for expenses properly and actually incurred in discharge of trustee duties concerning the Burwood Trust, proven by payment or ongoing liability. Most of Katrina's broader indemnity claims were rejected as insufficiently connected or inadequately proven.

Jurisdiction
Australia
Judgment Date
09 February 2024
Procedural Posture
Principal Judgment in Equity Proceedings / Determination of Corpus of Trust, Trustee Indemnity Claims, and Final Orders Following Delivery of Trustees' Report
Outcome
Orders made determining value of trust corpus and directing payment; most indemnity claims refused; costs awarded to Plaintiff and Trustees as specified.
Legal Topics
['express Trusts' 'bare Trusts' 'tracing Trust Property' 'trustee Indemnity' 'trust Administration' 'judicial Advice to Trustees' 'account and Restoration of Trust Fund']
['equity' 'trusts'] ['express Trusts' 'bare Trusts' 'tracing Trust Property' 'trustee Indemnity' 'trust Administration' 'judicial Advice to Trustees' 'account and Restoration of Trust Fund']

Case Brief

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Procedural Posture

Principal Judgment in Equity Proceedings / Determination of Corpus of Trust, Trustee Indemnity Claims, and Final Orders Following Delivery of Trustees' Report

Legal Issues

  1. 1 ['How should the corpus of the Burwood Trust be determined after sale and mixing of trust funds?' 'To what extent should tracing principles apply to reconstitute the Burwood Trust?' 'Is the trustee (Katrina) entitled to indemnity for certain expenses and legal costs?' 'Should a notional taxation or rental component be deducted/included in determining the trust corpus?']

Ratio Decidendi

The value of the Burwood Trust corpus should be determined by tracing the relevant trust funds and sale proceeds through subsequent transactions consistent with accepted equitable tracing principles (Re Hallett's Estate), applying agreed compound interest, but excluding notional rent and notional tax discounts. Katrina, though a bare trustee after 16 June 2009, is only entitled to indemnity for expenses properly and actually incurred in discharge of trustee duties concerning the Burwood Trust, proven by payment or ongoing liability. Most of Katrina's broader indemnity claims were rejected as insufficiently connected or inadequately proven.

Court Disposition

Orders made determining value of trust corpus and directing payment; most indemnity claims refused; costs awarded to Plaintiff and Trustees as specified.

Orders

  • ['First Defendant (Katrina) to pay $638,432.11 to the Trustees of the Burwood Trust representing corpus and income up to 12 December 2023, less allowed trustee indemnity claims.' "First Defendant to pay Plaintiff's costs since 1 September 2023 on an ordinary basis, as agreed or assessed." 'Trustees to be indemnified...