Application by Black [2016] NSWSC 1872

Supreme Court New South Wales

Medium Neutral Citation: Application by Black [2016] NSWSC 1872 Hearing dates: 15 December 2016 Date of orders: 15 December 2016 Decision date: 15 December 2016 Jurisdiction: Equity Before: McDougall J Decision: Advise that trustee would be justified in entering into transaction Catchwords: TRUSTS AND TRUSTEES – application for judicial advice – advice sought concerning the management or administration of trust property – Trustee Act 1925 (NSW), s 63 Legislation Cited: Trustee Act 1925 (NSW) Category: Procedural and other rulings Parties: Stuart Alexander Black (Plaintiff) Representation: Counsel: G Blake SC (Plaintiff)

Solicitors: Glass Goodwin (Plaintiff) File Number(s): 2016/376072 Publication restriction: Nil

Judgment (EX TEMPORE REVISED 15 dECEMBER 2016) 1. HIS HONOUR: The plaintiff (Mr Black) is the administrator of the intestate estate of Chung Li (also known as Kwong Chung Lee) who died on 15 November 2006 (the deceased). The deceased's New South Wales estate was very substantial indeed. It consisted principally of shares in two companies, Lee Tai Enterprises (Aust) Pty Ltd and Leetong Pty Ltd, and debts owed to him by those companies. 2. At the time of his death, the deceased was domiciled in what I will call for convenience Hong Kong (acknowledging that by doing so I ignore its constitutional and legal status as part of the People's Republic of China, but a special administrative region of that nation). Administration of his estate has been taken out in Hong Kong. Clearly enough, in very broad terms, Mr Black's duty is to account to the administrator in Hong Kong for the deceased's New South Wales assets, and in due course, upon completion of the administration, to pay over whatever of those assets remains in Mr Black's hands. 3. Those who take the deceased's estate on intestacy are his seven children who survived him. One of those children died after the deceased. Administration of her estate has been granted. 4. From time to time, pursuant to deeds between the various beneficiaries and to judicial advice given by other judges, Mr Black has made interim distributions on account, because the assets of the estate in New South Wales far outstrip whatever liabilities there may be. The present position appears to be, and in any event Mr Black will ascertain before making a final distribution, that there are no outstanding liabilities, at least of any significance. 5. In those circumstances, Mr Black wishes to make a further interim distribution to the Hong Kong administrator. That interim distribution would comprise shares held by Mr Black in the two companies to which I have referred. Those shares carry with them the right to receive very substantial dividends. No doubt, the Hong Kong administrator will take such steps as he may be advised are proper in respect of those shares and those dividends. 6. Thereafter, when final accounts and the like have been prepared and Mr Black is satisfied that there are no other liabilities, Mr Black proposes to make a final distribution by transferring the surplus assets to the Hong Kong administrator. 7. Mr Black seeks the advice of the Court pursuant to s 63 of the Trustee Act 1925 (NSW). That section authorises a trustee to apply to the Court for the Court's opinion, advice or direction on any question respecting the management or administration of trust property. The word "trust" is defined in s 5 to include the duties incident to the office of a legal personal representative. There is no doubt that Mr Black is such a person, and thus a trustee who may apply for advice. There is no doubt that the questions in respect of which he seeks advice concern the management or administration of the property of the trust. 8. The evidence satisfies me that all but one of the beneficiaries supports the proposed interim and final distributions. The opposition of one beneficiary appears to have been based on her view that further costs would be incurred if the distributions took place in a way that was then proposed (pursuant to a deed). It is somewhat ironic that her opposition may well have contributed to the incurring of further costs. 9. Regardless, the beneficiaries have no interest in any individual assets held by Mr Black in his capacity as administrator of the New South Wales assets of the deceased. They have a right to see the estate of the deceased administered according to the applicable law: the law of Hong Kong. The duty to do so is incumbent upon the Hong Kong administrator. Mr Black's primary duty is owed to the Hong Kong administrator. It is apparent that Mr Black and the Hong Kong administrator agree that the proposed interim distribution should be made now, and the final distribution should be made as soon as possible. 10. Mr Black has obtained the advice of Mr Garth Blake of Senior Counsel. Mr Blake sets out the facts, the relevant statutory provisions, authorities on the interpretation and application of those provisions and on the power of trustees to make interim distributions, and comes to the conclusion that Mr Black would be acting reasonably in making the interim distribution of shares. Mr Blake also concludes, properly, that once the local administration has been completed, Mr Black should make a final distribution. 11. The facts recited by Mr Blake in his advice are made good by the statement of facts that has been provided in support of the summons, and by the exhibit comprising documents, ex SAB1. His conclusions and advice are, in my view, correct based on those facts. 12. The only reason for taking time by giving these reasons for judgment is, as I have said, that one of the beneficiaries appeared to have some doubt about the way the administration was proceeding. Were it otherwise, I would not have taken up time. I say that because I am satisfied that Mr Black is entitled to the advice that he seeks. 13. For those reasons I am prepared to give that advice and I will do so upon draft orders being submitted.