Chang v Tjiong

Background

1. The background to the dispute is set out in the Judgment and is not necessary to repeat. However, it is useful to note the following so as to place the claims made, particular by Katrina for indemnity, in context.
2. The existence and terms of the Burwood Trust were the subject of findings by Palmer J in Chang v Tjiong [2009] NSWSC 122 at [32]; [36] (Chang v Tjiong No 1). His Honour concluded that the terms of the trust upon which Hok's son (George) held the trust property included a limited power of appointment ([40]) and that this was a "trust power", such that if George failed to exercise the power of appointment there would be no resulting trust but the Court would exercise the power in a manner best calculated to give effect to Hok's intention ([41]). The terms of the trust were for the Burwood Unit (and its subsequent sale proceeds) to be held on trust for the benefit of Hok's wife (Kwat) during her life and thereafter applied according to George's discretion for the benefit of members of Hok's family according to their needs: Chang v Tjiong No 1 at [36].
3. The Burwood Unit was occupied until 1994 by Kwat. It was then rented out for a period. The Burwood Unit was sold in 1996 (before Kwat's death in 2006) and the net proceeds of sale (of $168,331.06) were deposited into a bank account in George's name (the MacBank Account). Palmer J found that the sale proceeds were mingled with George's personal funds in breach of trust (Chang v Tjiong No 1 at [37]).
4. George became incapable of managing his affairs in late 2001 after he suffered a stroke on 24 December 2001. George had earlier executed a Power of Attorney in favour of Richard and Katrina jointly. I accepted Katrina's evidence that George's brother, Richard, was the effective controller of George's financial affairs from 24 December 2001 until George's death (evidence consistent with Palmer J's finding in other proceedings involving the family members that Richard took over management of George's investments (the 2005 Removal Proceedings referred to below). George died on 30 January 2004 and probate of his 23 December 2001 Will was granted to Richard on 18 March 2004. In that Will, George left the whole of his estate to Katrina and Lindsay in equal shares.
5. From 2005, a succession of proceedings were commenced between members of Hok's family.
6. First, in 2005, Katrina and her brother, Lindsay, commenced proceedings against Richard seeking his removal as administrator of George's estate and trustee of the George Tjiong family trust (GT Trust) (the 2005 Removal Proceedings). On 16 June 2009, consent orders were made for the replacement of Richard by Katrina as trustee of the GT Trust, for the revocation of the grant of probate to Richard of George's will and for the appointment of Katrina as administrator of George's estate (as well as orders for the transfer of all the assets and records from George's estate and the GT Trust to Katrina).
7. During the course of the 2005 Removal Proceedings, Palmer J delivered Chang v Tjiong No 1, which as noted above, found the existence of the Burwood Trust. At the resumed hearing of the 2005 Removal Proceedings, there was discussion between counsel for Katrina and Lindsay and Palmer J about the "Burwood issue", during which reference was made to the net proceeds of the sale of the Burwood Unit in 1996 of $168,331.06 and the funds that "today should be set aside that represents the net proceeds of Burwood" (T12.17-20 and T12.49-50). There was also the following exchange (T13.12-T15.9): "EVANS: … Your Honour found on the basis of the document that was preferred that the Burwood property was held, or the proceeds were held on a trust to provide for the mother while she was alive and thereafter for the descendants of the grandfather in what would appear a discretionary trust. The finality of that matter still awaits. In dealing with the final orders, I have sought to identify a fund that would properly represent today safely the proceeds of the sale of the Burwood property to await final orders in that case. … HIS HONOUR: I don't think it is really part of these short minutes at all. This is a matter for the present executor of George's estate whoever it is now-- EVANS: Katrina HIS HONOUR: That is something she has to deal with in the course of administration of the estate. It is not part of these proceedings. … EVANS: It would seem that there would need to be an application for judicial advice as to the manner in which the Burwood Trust should be disposed of, but the purpose of the drafting of clause 15 and the purpose of my submissions is to say that when one traces the proceeds of Burwood through to Terrey Hills and the subsequent investment of those moneys, the sum we would say today that would represent the proceeds of sale of Burwood is a number of the order of 250 to $260,000… HIS HONOUR: It is too hard and shouldn't be dealt with in these proceedings. I will release the undertaking previously given because I don't think it was appropriately given anyway. That leaves Katrina as trustee of George's estate in the position of "how do I administer the estate bearing in mind that there is a judgment finding that part of the estate funds are in fact owed to somebody else". EVANS: Or subject to a discretionary trust and your Honour must assume she will act correctly"
8. On 4 June 2010, Palmer J delivered judgment in the 2005 Removal Proceedings, declaring that the GT Trust (which Richard had established) was obtained by fraud, undue influence and unconscionable conduct on the part of Richard: Tjiong v Tjiong [2010] NSWSC 578. An appeal from that decision was dismissed on 29 June 2012: Tjiong v Tjiong [2012] NSWCA 201.
9. Meanwhile, Kwat died on 28 December 2006 and probate of her Will was granted to her daughter, Soei Lan Chang, Tzer's mother (and Richard's sister). In 2007, Soei, in her capacity as executrix of Kwat's estate, commenced the proceedings against Richard which led to Palmer J's Judgment in Chang v Tjiong No 1. In those proceedings, to which Katrina and Lindsay were joined as defendants (being the sole beneficiaries of George's estate), Soei claimed that the Burwood Unit was held by George on trust for Hok and that Hok's beneficial interest passed on intestacy to Kwat. As noted above, Palmer J made findings in 2009 as to the existence and terms of the Burwood Trust.
10. In 2010, District Court proceedings were commenced by Katrina and Lindsay seeking restitutionary relief against Richard, those claims arising from findings by Palmer J in Chang v Tijong No 1.
11. In 2011, shortly after Katrina was appointed administrator of George's estate and trustee of the GT Trust, Soei commenced proceedings seeking a grant of probate of an alleged will of her father, Hok, in which Hok purported to revoke the Burwood Trust and deal with the proceeds of sale as part of his estate (Alternate Will proceedings). Katrina was joined to the Alternate Will proceedings and defended them, relying on a forensic examination of the purported Will. After service of the document examiner's report, Soei withdrew her application for probate of the alleged Will. White J, as his Honour then was, declined to order that Soei pay Katrina's costs of these proceedings.
12. In 2019, Richard commenced three sets of proceedings in this Court (as set out at [55] of the Judgment), essentially seeking to set aside the decisions made by Palmer J and the Court of Appeal and, in one of the proceedings seeking similar orders to those sought by Tzer in the proceedings, which were commenced by Tzer on 24 July 2020 (and the subject of the Judgment).
13. In 2020, these proceedings were commenced by Tzer, as a potential beneficiary of the Burwood Trust, alleging breach by George (then deceased) of his duties as trustee (by mingling the trust assets with his own) and alleging, among other things, that Katrina was a bare trustee of the Burwood Trust, as a result had duties to restore, protect and account for the Burwood Trust and was liable to account for the Burwood Trust and had failed to do so. The main issue at the hearing (which is the subject of the Judgment) was whether certain payments made by George to Lindsay on 19 July 1999 constituted an exercise of the power of appointment conferred on George under the terms of the Burwood Trust and resulted in the termination of the Burwood Trust by distribution.
14. At the hearing, Katrina accepted that George was the trustee of the Burwood Trust and the property was to be held by him in accordance with the terms of the trust as enunciated by Palmer J in Chang v Tjiong but contended that the Burwood Trust had been determined by distribution in exercise of George's power of appointment (by the payments made to Lindsay in July 1999). While Katrina pleaded that she did not become a trustee of the Burwood Trust (because it had been determined by distribution), she accepted that she was under a duty (as administrator of George's estate) to inquire into and establish what had happened to the actual assets of the Burwood Trust. Katrina contended that she was hindered from so doing due to Richard's conduct and the impact of the legal proceedings that led to his removal as administrator of George's estate.
15. The issue in dispute was determined against Katrina. I was persuaded that, on the balance of probabilities, the payments to Lindsay were most likely a gift from George from his personal funds and were not a distribution of or from the corpus of the Burwood Trust and concluded that the Burwood Trust had not been determined. The consequence of that was that the corpus of the Burwood Trust remained part of George's estate and probably also the GT Trust, with Richard becoming bare trustee after George's death until 16 June 2009 and Katrina the bare trustee of the Burwood Trust since that time: Judgment at [113] and [120]-[122].
16. Katrina gave evidence at the initial hearing before me that she distributed George's estate to herself and Lindsay and wound up the estate in 2013. She also said that there was money kept aside in the family trust "just in case for all of this" and referred to "sufficient funds in the family trust", which I understood to be a reference to the GT Trust: Judgment at [42].
17. As explained in the Judgment, at [34], I proceeded on the basis that the value of George's estate and the GT Trust (which also included funds impressed with a related trust, the Oninama trust) when Katrina replaced Richard as the administrator of George's estate and trustee of the GT Trust in 2009 was $2,686,518.70 (the valuations being as at 11 August 2009). I refer to this money as the Estate Funds.
18. As noted at [64] of the Judgment, by the end of the hearing the parties were agreed that if (as I ultimately concluded) the Burwood Trust was found not to have been determined by the payments to Lindsay then orders (the terms of which were largely agreed) should be made regarding the Burwood Trust and the appointment of independent trustees. I also noted that Tzer had agreed to fund the appointment of an independent trustee in the amount of $30,000 and that Katrina maintained that she was entitled to be indemnified and had a lien over any funds left in the Burwood Trust in respect of legal and other fees incurred by her in these and other proceedings involving members of the Tjiong family: [66].
19. I was satisfied that new and independent trustees should be appointed to the Burwood Trust, noting that there had not been a proper exercise of the power to appoint the income and capital of the Burwood Trust which was to take effect after Kwat's death and that the appointment of such trustees would enable proper inquiries to me made to ascertain the corpus of the Burwood Trust and the due administration of the trust: [125].
20. I also considered it apparent from Katrina's evidence in cross-examination that she may be in a position of conflict, by reason of her various roles as a bare trustee and potential beneficiary of the Burwood Trust and beneficiary of George's estate: [126].
21. As set out above, I made orders appointing the new trustees, for them to provide a Report on the corpus of the Burwood Trust, with the amount to be paid to be paid to the trustees and held by them subject to the terms of the Burwood Trust to be determined after delivery of the report and that, in arriving at its determination of the amount payable (if any), the Court may decide any matter relevant, being questions concerning the corpus, income and any claims for indemnity out of the Burwood Trust funds.
22. Order 9 of the orders I made on 16 August 2022 provided that the report by the Trustees was to identify any claims by Katrina for indemnity in relation to expenditures said to have been incurred with respect to the management, administration or otherwise related to the Burwood Trust. In the Judgment, I noted that Katrina had asserted a lien over the funds based on a right of indemnity from the assets of the Burwood Trust in relation to costs incurred in dealing with issues relating to the Burwood Trust, the new trustees should be out on notice of her claims for indemnity but any ruling on them was to be dealt with by the Court at a later stage: [133].
23. I also ordered that Tzer be entitled to be indemnified from the said amount with respect to the fees paid to the Trustees from the fund (Order 14) and that the Trustees be indemnified for their costs from that amount on the trustee basis (Order 15).

Events leading up to Trustees' 1 September 2023 notice of motion

1. By Deed of Appointment and Retirement of Trustee - The Burwood Trust, executed on 3 November 2022, Messrs Hall and Heesh appointed Mark Kenneth John Everingham as a new trustee of the Burwood Trust, Mr Hall simultaneously retiring as trustee. Tzer and Katrina each consented to the appointment of Mr Everingham and the retirement of Mr Hall as trustee of the Burwood Trust. In what follows, I refer to Mr Heesh and Mr Everingham jointly as the Trustees.
2. By orders made on 13 February 2023, the Trustees were joined as the second and third defendants to the proceedings.
3. Mr Heesh prepared a report dated 7 February 2023 (Report), which was reviewed by Mr Everingham, in response to the orders made on 16 August 2022.
4. The Report (described by the Trustees as an interim report) stated that "identifying what became of the funds leads directly to three (3) identifiable outcomes for the funds", the first two of which "capture" the treatment of the Burwood Unit Sale proceeds (of $168,331.06) when banked into George's MacBank Account. The third identifiable outcome was described as having occurred after tracing moneys identified in Outcome 1 to a certain "dealing" where a portion of the funds could be traced further (while a smaller portion could not be traced past the date of first identification). The Report indicated the Trustees' view that the Court's direction should be sought as to the adoption of one of two approaches in identifying the corpus and income of the Burwood Trust. Throughout the body of the Report the Trustees raised a number of issues or questions on which they indicated that assistance or advice of the Court was sought prior to the issuing of a final report. The Report also stated that as at the date of the Report, the Trustees had neither been put on notice nor received any claim for indemnity from Katrina.
5. There was then some dispute between the Trustees and Katrina as to whether Katrina had properly identified her claims for indemnity. Katrina's solicitors advised the Trustees that her claim for indemnity was contained in a draft Amended Defence (which I had refused Katrina leave to rely on at the earlier hearing).
6. Directions were made by the registrar on 28 February 2023 for the filing and service by Katrina of evidence in relation to her claim for indemnity and for evidence in reply, with subsequent extensions of that timetable. An affidavit from Katrina's solicitor (Mr O'Brien) was filed in May 2023, Complaint was made by the Trustees that this did not comply with the directions that had been made.
7. In mid-2023, the Trustees notified the Court and the other parties their intention to file a notice of motion seeking directions from the Court about the Report.
8. On 17 August 2023, the day before the matter was listed for directions before me, Katrina commenced fresh proceedings (2023/00262231) by filing a statement of claim against the Trustees seeking various declarations as to her claimed indemnity for costs and fees incurred in relation to the Burwood Trust.
9. At the directions hearing before me on 18 August 2023, the Trustees pressed for Katrina's statement of claim to be set aside as an abuse of process. I stayed the fresh proceedings until further order and noted that Katrina's counsel was to notify my chambers by 4pm on 25 August 2023 whether Katrina proposed to withdraw the fresh proceedings. I directed that Katrina file and serve, by 1 September 2023, a document identifying (by cross-referencing to the specific documents already provided to the Trustees), the evidence relied upon in support of her claim for indemnity in relation to expenditures incurred with respect to the management or administration or otherwise related to the Burwood Trust and a two page outline of the basis of those claims. Directions were also made as to the filing of evidence and submissions in relation to the Trustees' proposed notice of motion for directions in relation to the Report, which they said would be amended in light of comments from the court.
10. On 25 August 2023, my chambers received a communication from Katrina's solicitor advising that Katrina proposed to withdraw her statement of claim.
11. By letter dated 1 September 2023, Katrina's solicitor filed and served an affidavit of that date, referencing the documents relied upon by her in support of her claim for indemnity. In that affidavit, the solicitor deposed that Katrina also relied on the statement of claim filed in proceedings 2023/262231 (notwithstanding that Katrina's solicitor had earlier advised my associate that Katrina proposed to withdraw her statement of claim). Subsequently, a further affidavit of Mr O'Brien dated 26 September 2023 was served.

Trustee's 1 September Notice of Motion

1. By notice of motion filed on 1 September 2023 (Motion) (this replaced the earlier motion filed by the Trustees), the Trustees sought advice from the Court with respect to certain questions relating to the calculation of the corpus (including any accretions) of the Burwood Trust and the income (including any accumulations) for the relevant period (that being from the date of the receipt of the proceeds of sale of the Burwood Unit (31 December 1996), those proceeds amounting to $168,331.06 (defined in the notice of motion as the BTA).
2. Those questions were as follows: 1. With respect to the amount of $131,537.46 ("THA") of the total BTA, being the amount applied by George Tat Loek Tjiong ("George") for the purchase of 35 Coreen Avenue, Terrey Hills in the State of New South Wales on or about 24 November 1997 ("the Terrey Hills Property"), should the Trustees: a. not trace the THA at all, and only charge and capitalise interest to the THA (being the amount of $131,537.46) from 24 November 1997 to date? b. trace the THA into the Terrey Hills Property such that it became $218,255.34 on or about 17 January 2003 when the Terrey Hills Property was sold by George, with interest charged and capitalised on the amount of $218,255.34 from 17 January 2003 to date? c. trace the THA until June 2015, and then charge and capitalise interest on the traced amount from June 2015 to date? d. trace the THA to date? 2. If the Court considers that the THA ought to be traced as per either prayer [1(c)] or [1(d)], then of the $46,136.89 of the THA traced from the sale of the Terrey Hills Property, whether interest should be charged and capitalised from 21 February 2003 to date on the amount of $46,136.89? 3. With respect to the remaining amount of $36,793.60 ("RA") of the total BTA, which was not applied by George to purchase the Terrey Hills Property on or about 24 November 1997, should the Trustees: a. trace the RA until April 2004, and then charge and capitalise interest on the resultant traced amount from April 2004? b. not trace the RA, but charge and capitalise interest on the RA from 24 November 1997 to date? 4. Whether the rate of interest to be charged and capitalised ought to be: a. 4.75% per annum; or b. another amount?
3. Prayer 5 of the relief sought in the notice of motion is: 5. Without limitation of the final amount to be paid, order that the First Defendant pay the Trustees the amount of $168,331.06.
4. The Trustees' Motion came before me for hearing on 18 October 2023.
5. At the outset of the hearing, counsel for Katrina confirmed her instructions to withdraw the statement of claim that she had filed and indicated that a notice of discontinuance would be filed on the basis that Katrina would pay the defendants' costs as agreed or assessed.
6. Notices to produce that had been issued by Tzer, seeking copies of advices referred to in Mr O'Brien's affidavit, were called upon (and copies produced by the Trustees).
7. The Trustees accepted that prayer 5 of the prayers for relief would not be dealt with on 18 October 2023, as it was necessary for the Trustees' final report to be received in which Katrina's claim for indemnity would be addressed.
8. Thus, the hearing proceeded on the basis of the issues raised by the questions in paragraphs 1-4 of the Motion and what claims for indemnity Katrina was making.
9. At the hearing, Katrina confirmed that her claims for indemnity were those set out in [16] of her written submissions dated 1 October 2023 (as elaborated on in the affidavit of Mr O'Brien of 26 September 2023). In summary, Katrina identified 13 claims in respect of costs incurred in various proceedings (including the 2005 Removal Proceedings) and the provision of legal advice, some of which involved claims for indemnity for a percentage of costs incurred in proceedings as the "Burwood component" of those proceedings' costs. The details of Katrina's claims are set out below.
10. At the end of the hearing, I indicated my then thinking as to the issues that had been debated about questions 1-4 and the Report and the matter was adjourned to 25 October to enable the parties to confer and see if they could agree on what issues remained and directions for next steps, including updated calculations by the Trustees to take into account matters that had been agreed.
11. At the hearing on 25 October, the parties were agreed on some issues that had been the subject of debate on 18 October, including that the Trustees should not trace as per question 1(d) of the Motion and that the interest should be calculated at 4.75% compounding on an annual basis. It was also accepted that the matter should be relisted for a final hearing on the remaining issues, including on Katrina's claim for indemnification, so as to determine the amount (if any) to be paid to the Trustees as the corpus of the Burwood Trust, prior to which the Trustees were to serve a Revised Report.
12. On 27 October, I made procedural directions for the Trustees to serve a further report and the parties to serve further submissions and updated calculations on the remaining issues and listed the proceedings for a final hearing on 12 December 2023 for the purposes of determining the amount of the corpus of the Burwood Trust and Katrina's claims of indemnity.
13. On 17 November 2023 (after the parties were unable to agree), I made directions in relation to the next iteration of the Trustees' Report, as follows: 1. The Trustees to serve and lodge with the Associate to Henry J, the Trustees' Revised Report and an outline of written submissions (no more than 10 pages), by 22 November 2023. The Trustees' Revised Report and written submissions are to include a separate section on the corpus of the Burwood Trust, provide calculations in respect of prayers 1b, 1c and 3 of the Motion, address the issue of taxation (if any) and include a summary of the first defendant's claim for indemnity in accordance with the following directions.: (a) With respect to the amount of $131,537.46 ("THA") of the total BTA (defined as the proceeds of sale of the Burwood Unit in the State of New South Wales on 31 December 1996 of $168,331.06), being the amount applied by George Tat Loek Tjiong ("George") for the purchase of 35 Coreen Avenue, Terrey Hills in the State of New South Wales on or about 24 November 1997 ("the Terrey Hills Property"), the Trustees are to undertake alternative calculations that reflect prayers 1b and c of the Notice of Motion filed on 1 September 2023 ("the Motion") being: a. Prayer 1b - tracing the THA into the Terrey Hills Property such that it became $218,255.34 on or about 17 January 2003 when the Terrey Hills Property was sold by George, with interest charged and capitalised from 17 January 2003 to date at the rate of 4.75% compounding on an annual basis on the amount of $218,255.34, that has been recalculated: i. the following costs and expenses asserted by the first defendant in respect of the purchase of the Terrey Hills Property: 1. stamp duty in the amount of $11,919; and 2. solicitor's costs in the amount of $1,129. ii. the amount of $12,301.50 asserted by the first defendant for pre-sale expenses including advertising costs and pre-sale painting, cleaning and garden work being costs and expenses of the sale of the Terrey Hills Property. b. Prayer 1c - tracing the THA until June 2015, and then charge and capitalise interest on the traced amount from June 2015 to date at the rate of 4.75% compounded on an annual basis. 2. With respect to the remaining amount of $36,793.60 ("RA") of the total BTA, which was not applied by George to purchase the Terrey Hills Property on or about 24 November 1997, the Trustees are not to trace the RA, but charge and capitalise interest on the RA from 24 November 1997 to date at the rate of interest of 4.75% compounded on an annual basis. 3. The Trustees to consider whether or not interest on the amount of $168,331.06 should be calculated from 23 December 1996 to 24 November 1997 at the rate applicable to the Macquarie Bank Cash Investment Trust Account No 117158055 at that time. 4. The Trustees to take into account any tax that may apply (if any) that the first defendant contends should be deducted for the period from December 1996 to October 2023, on the basis asserted by the first defendant that the income of the Burwood Trust is undistributed income of a trust and thus taxed at top marginal rates (48.50% for the period 1997 to 2006, 46.50% for the period 2007 to 2013 and 47% for the period 2014 to 2023) and provide calculations that take into account any such tax. 5. The Trustees to update their Interim Report dated 7 February 2023 by including a summary of the first defendant's claims for indemnity as set out in the first defendant's outline of written submissions filed 11 October 2023. In doing so, the Trustees are to identify documents that have been received in relation to the first defendant's claims for indemnity.
14. A revised report prepared by Mr Heesh and reviewed by M Everingham was served by the Trustees on 22 November 202, with a summary by way of addendum served on 4 December 2023 (Revised Report).
15. Each of Tzer, Katrina and the Trustees served further written submissions in relation to the Revised Report and Katrina's claims for indemnity. Katrina also served further calculations in response the Revised Report.

Issues for determination

1. The further hearing took place on 12 December. At the hearing, there were three broad matters for determination.
2. First, the resolution of issues relating to the Trustees' approach to valuing the corpus of the Burwood Trust.
3. Second, determination of Katrina's claims for indemnity.
4. Third, costs.
5. It was common ground that resolution of the first and second issues would determine what amount (if any) should be paid by Katrina to the Trustees, which amount was to be held by the Trustees subject to the terms of the Burwood Trust.

Corpus of the Burwood Trust

1. The approaches proposed by the Trustees to determine the corpus value of the Burwood Trust, include those which involve some degree of tracing. In the Judgment, at [91]-[92] and [102]-[104], I referred to some of the relevant principles by reference to Re Hallett's Estate (1879) 13 Ch D 696; [1874-80] All ER Rep 793 (Re Hallett's), Australian Receivables Ltd v Tekitu [2010] NSWSC 823, James Roscoe (Bolton) Ltd v Winder [1915] 1 Ch 62, Re Global Finance Group Pty Ltd [2002] WASC 63 and Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588; [2000] HCA 25 (Associated Alloys).
2. In summary, and as referred to in J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (8th ed, 2016, LexisNexis) at [27-08]-[27-09] (without citations): 1. Where trust property has been mixed with the trustee's own personal property and there have been both deposits of other moneys and withdrawals after the wrongful payment of the funds in question, the Court approaches the situation on the basis that the allocation of withdrawals should be ordered by reference to the principle that wherever an act 'can be done rightfully, a fiduciary is not allowed to say, against the person entitled to the property or the right, that he has done it wrongfully' and that in those circumstances. The rule in Clayton's case (Devaynes v Noble (1816) 1 Mer 529; 35 ER 781), whereby it is assumed that, in the absence of evidence to the contrary, a person intends to draw from his account money in the order of payments in, was not applicable. That position is known as the rule in Re Hallett's and is based on the presumption that a trustee or other fiduciary in such a position intends to act honestly and hence is presumed to draw out and dissipate from a mixed account the trustee's own moneys first. 2. The principles laid down in Re Hallett's have been elaborated and qualified in a number of ways, in particular, it being said that there is no presumption that a trustee having manifestly committed a breach of trust intends by his subsequent acts to repair it and also that where there is no balance remaining in the account, but assets have been acquired by the trustee with the withdrawn money, it is assumed that the trustee intended the investment to be for the benefit of the fund irrespective of the order of withdrawals. 3. Where a trustee improperly creates a mixed fund consisting partly of the credit in a mixed account and partly of assets purchased with drawings therefrom, the beneficiary has a charge over each and every part of the amalgam. The withdrawal by the trustee from a mixed fund is for purposes of investment then it seems that such a withdrawal may be treated as being for the benefit of beneficiary.

The Trustees' three options

1. In the Revised Report, the Trustees present three available options for determining the amount of the Burwood Trust (the corpus and lay income and accumulation) as at 12 December 2023. Each of these options takes account in different ways of the following transactions and developments involving the Burwood Trust funds: 1. as at 31 December 1996, the sale proceeds of the Burwood Unit of $168,331.06, were held in the MacBank Account (this is not disputed and is recorded in the Judgment at [18] and [87]). The Trustees assume that interest was earned on this sum until 24 November 1997 at the rate of 4.75% per annum; 2. on about 24 November 1997, George acquired a property at Terrey Hills (for the sum of around $378,000), using $131,537.46 from the funds held in the MacBank Account (THA); 3. after the purchase of the Terrey Hills property, $36,793.60 remained in the MacBank Account, where it earnt interest; 4. the Terrey Hills property was sold on about 17 January 2003 for $620,000 (net sale proceeds of $605,764.24), of which $206,444.86 after adjustments is attributable to the amount t (of $131,537.46) the Burwood Trust contributed to the purchase price from the MacBank Account in 1997. The net sale proceeds were deposited into a St George Account which already contained funds; 5. in February 2003, $600,000 was transferred from the St George Account into a Commonwealth Bank securities investment account. After the transfer, $46,136.89 was left in the St George Account; 6. in around 2004, the relevant Commonwealth Bank account came under the control of Richard Tjiong as trustee for the GT Trust; and 7. from around 2007, the estate and GT Trust assets were in accounts under the management of Perpetual Trustee Company Limited.
2. The three options in the Revised Report for identifying the value of the corpus and income of the Burwood Trust are as follows: 1. Option 1, which calculates the amount of the Burwood Trust to be $783,621.59 based on the following approach: 1. the $131,537.46 of Burwood Trust funds (THA) used to purchase the Terrey Hills property was traced until 22 January 2003, after the sale of the property, which involved tracing the $131,537.46 into the proceeds of the sale. Of the gross sale proceeds of $620,000, the net figure attributable to the Burwood Trust funds is $206,444.86 (after sale costs and stamp duty were taken into account). Interest of 4.75% per annum compounding on an annual basis was then applied to this sum from 22 January 2003 until 12 December 2023, to give a total sum of $544,510.24; 2. the $37,808.70 (RA) left in the MacBank Account after the purchase of the Terrey Hills Property was subject to interest of the 4.75% interest compounding annually from 1 July 1997 until 12 December 2023, giving a sum of $123,281.95; 3. the Burwood Trust was then attributed notional rental income on the Terrey Hills property for the period between its purchase on 24 November 1997 and settlement of its sale on 22 January 2003, calculated to be $30,871.25, to which interest of 4.75% compounded annually was applied from 22 January 2003 until 12 December 2023, giving a sum of $92,303.48 (Notional Rent Sum); and 4. for the 11 months the $168,331.06 was in the MacBank Account between 23 December 1996 and 24 November 1997, $7016.88 in interest was earned. A compound interest rate of 4.75% was applied to this figure between 24 November 1997 and 12 December 2023, producing a sum of $23,525.91. 1. Option 2, which calculates the amount of the Burwood Trust to be $1,024,337.09, based on the following approach: 1. the THA is traced through a series of movements which, in essence, seek to trace the Terrey Hills sales proceeds from the St George Account (being the $206.444.86 attributable to the Burwood Trust), and the subsequent transfer of $600,000 out of that account in February 2003, which left behind the sum of $46,136.89 as follows: 1. the $206,444.86 amount (as at 21 January 2003) is 'traced' through to June 2015 by reference to a series of transactions in various bank accounts and investments accounts (including when funds were under management by Perpetual), which are referred to as Burwood Trust Movements 6-27, which gives a figure of $469,747.91, to which interest of 4.75% compounded annually is applied until 12 December 2023, for a total sum of $664,002.49; and 2. the remaining $46,136.89 is wholly attributable to the Burwood Trust to which interest at 4.75% compounded annually until 12 December 2023, giving a total of $121.223.26. 1. as in Option 1, the RA is compounded at 4.75% from 1 July 1997 until 12 December 2023, for a total of $123,281.95; Notional Rent on the Terrey Hills property is calculated to which interest of 4.75% is applied to produce a figure of $92,303.48; and the 11 months of interest on the $168,331.06 was calculated and compounded to produce a figure of $23,525.91. 1. Option 3, the simplest approach (and offered mainly by way of comparison), calculates interest on the Burwood Trust sale proceeds of $168,331.06, from the date of banking to 12 December 2023 at the rate of 4.75% compounding annually, producing an amount of $589,940.25.

Consideration and determination

1. The issue for determination is the value of the corpus of the Burwood Trust before taking into account any claims for indemnification by Katrina. That issue is to be resolved by reference to the Options presented in the Revised Report and the approach advanced by Katrina.
2. Katrina had undertaken her own set of calculations of the value of the Burwood Trust which was served with her written submissions on 6 December 2023 and set out a schedule headed "First Defendants' Calculation of the Corpus of the Burwood Trust". It is unnecessary to set out in these reasons an explanation or reference to all of Katrina's calculations and aspects of her written submissions as ultimately at the hearing, there was significant agreement between the parties as to which Option was most appropriate, what interest rate should be applied and the correctness of calculations undertaken by the Trustees, as referred to previously. I simply note here that the net value of the Burwood Trust as at 12 December 2023 that Katrina advanced was $423,854.32. Katrina's approach to calculation was not dissimilar to the Trustees' Option 1, in that Katrina's took into account the sale of the amount of the Burwood Trust funds ($131,537) used for the purchase of the Terrey Hill property and the proceeds of sale of that property attributable to the Burwood Trust ($206,444.82) with the main differences being that Katrina applied a notional income tax factor to be deducted of $160,940.62, and did not include the Notional Rent Sum of $92,303.48.
3. By the end of the hearing, the issues in dispute had narrowed and were about whether a taxation component should be deducted from the corpus of the Burwood Trust and whether a component for Notional Rent earned should be included. I address those matters below.
4. As to the three Options proposed by the Trustees, two of which apply some form of tracing, the parties' position can be summarised as follows:
5. As to the Trustees, at the hearing on 12 December 2023, the Trustees initially recommended Option 2, contending that it was the most appropriate calculation as it dealt with the movement of funds through various comingled assets. However, during the course of the hearing that submission was withdrawn. The Trustees indicated that they no longer pressed Option 2, recommended Option 1 (including the component for Notional Rent) for a total corpus value of $783,621.58 and did not press Option 3.
6. Katrina initially submitted that there should be no tracing at all and proposed that value of the corpus should be calculated according to something akin to Option 3 but including a factor for the Terrey Hills investment (as noted earlier). However, her position also changed during the hearing. After some debate, Katrina's counsel accepted Option 1, subject to objections in relation to the claim for Notional Rent and that an amount for notional income tax should be deducted.
7. In other words, there was agreement on the tracing aspects of Option 1 and the calculations undertaken by the Trustees in that regard.
8. I am satisfied that the Trustees' approach in Option 1 is appropriate in this case. That is, it is appropriate to trace the amount of $131,537.46 sale proceeds of the Terrey Hills property and allocate an amount from those sale proceeds as representing an amount to be attributable to the Burwood Trust which, as ultimately agreed by the parties, was $206,444.86 (after adjustments had been made to take into account the matters raised by Katrina at the hearing). The exercise of tracing that amount in that manner seems to me to be generally consistent with the tracing principles to which I have referred and involves no strained assumptions as to what amounts should be attributable to the Burwood Trust or not. Option 1 also assumes, appropriately in my view, that the amount of $36,793.60 that remained in the bank account after the purchase of the Terrey Hills property cannot be traced and interest should be applied to that amount.
9. On the other hand, Option 2 involved tracing into and through a series of complicated transactions as well as making various assumptions in the context of heavily co-mingled funds and accounts of changing control. To my mind, they raised significant uncertainties as to the value of the tracing exercise and whether it was consistent with the legal principles.
10. As for interest, as already noted, the parties agreed that a rate of 4.75% per annum to be compounded on annual rests should be applied.
11. In my opinion, an interest rate of 4.75% per annum is appropriate as the period over which interest is to be calculated is a long one and there have been interest fluctuations over that period. The basis on which the Trustees recommended that interest rate was reasoned, in my view.
12. I note here that there were other issues raised by Katrina during the hearings regarding the Trustees' approach and their calculations, including about the amounts that represented the Burwood Trust component of the sale proceeds of the Terrey Hills property. In submissions for Katrina, it was said that the money paid out of the MacBank Account on the purchase of the Terrey Hills property was due to a mistake that had been made by George as to the settlement date and the need for George to access funds quickly to complete the purchase, that there was no intention of George to "invest" those funds and the funds were "restored" when the settlement proceeds for the sale of that property were subsequently received. The first of these issues was resolved by the Trustees taking into account certain sums and adjusting the Burwood Trust amount said to be attributed to the sale proceeds of the Terrey Hills property, which was ultimately agreed at $206,444.86. The second issue, about the 'mistake' investment, is of no consequence in my view, given that tracing under Option 1 assumes that George restored the Burwood Trust and the money used for the Terrey Hills property was for the benefit of the Burwood Trust fund.
13. As to the remaining issues in dispute, as noted above, the Trustees include in Option 1 an amount of $92,303.48 as the Notional Rent Sum for rent on the Terrey Hills property between November 1997 and its sale in January 2003, as well as interest. I should also record that the Trustees had previously made a claim for rent in respect of the Burwood Unit in the period prior to its sale from 1 July 1994 to 31 December 1996. The Court directed that amount not to be included in the Revised Report, noting that the orders made in the Judgment provided that the corpus of the Burwood Trust and income was to be valued from the date of the receipt of the proceeds of sale, being 31 December 1996.
14. Katrina objects to the inclusion of the Notional Rental Sum.
15. The Trustees claim for the Notional Rent Sum assumes that the Burwood Trust should have received rent for the period of the ownership of the Terrey Hills property between 24 November 1997 and until it was sold on 22 January 2003. I reject the Trustees' claim for Notional Rent for that period and any interest. This is for two reasons.
16. First, the methodology adopted by the Trustees which applies a gross rental yield method of 5% based on an average property value, is unsupported by any evidence as to the reasonableness of those assumptions. It also assumes a maintenance cost factor of 30% to bring the net rental down, which is unsupported by any evidence.
17. Secondly, it seems to me that the Notional Rent Sum claim, together with the tracing calculation and the application of 4.75% interest involves some double dipping, given that the calculations of the traced amount takes into account an increase in the value of the Terrey Hills property and interest is applied to that sum and the remaining RA throughout the relevant period.
18. As to tax, Katrina submits that tax should be deducted for the period from December 1996 to October 2007 on the basis that undistributed income of a trust would be taxed at the top marginal rate. As I understand it, her contention is that it would be unfair if tax was not deducted because tax would have been paid on the funds during the period in question.
19. I do not accept Katrina's submission and am persuaded by the Trustees' position that there should be no discount or reduction to the Burwood Trust corpus for a notional amount of taxation. This is because, as the Trustees submitted, there is no evidence of the filing of taxation returns for George's estate nor evidence of assessments issued and tax being paid with respect to the estate or the GT Trust. Further, as the Trustees noted, they will be obliged to file taxation returns and personally (with recourse to the trust fund) pay tax on the net income of the Burwood Trust (on the basis of no beneficiary being presently entitled to the net income). Providing a discount on account of notional taxation (without evidence of actual tax paid) would therefore effectively reduce the sum received for the benefit of the beneficiaries of the Burwood Trust twice, once on account of a notional reduction for taxation, and the second on account of actual tax payable by the Trustees.

Conclusion

1. In conclusion, I find that that subject to Katrina's claim for indemnity, the corpus of the Burwood Trust is $691,318.11 as at 12 December 2023. This is based on the amount calculated by the Trustees in the Revised Report as Option 1 for calculating the corpus of the Burwood Trust, less the amount $92,303.48 attributed to rent which I have rejected.
2. As an aside, I note that this amount is close to the amount of $691,992.05 in Table 2a of Katrina's calculations, which was another calculation that Katrina had proposed. That calculation also adopted the amount of the proceeds of sale of the Burwood Unit (of $168,331.06), added an amount of $74,907.36 (said to represent the investment into and from the sale of the Terrey Hills property) and interest earned at 4.75% compounded annually (and excluding any tax) of $448,753.67, giving a figure of $691,992.05.

Katrina's claims for indemnity

1. Katrina has 13 claims for indemnity, which can be grouped into two types of claims: (1) claims for indemnity for 100% of the costs said to be incurred solely in relation to the Burwood Trust (for legal proceedings, advices, correspondence) and (2) claims for indemnity for a percentage of the costs incurred in relation to legal proceedings in which Katrina has been involved and seeking some advice, which relate to George's estate and the GT Trust more broadly.
2. As to the second type of claim, Katrina contends that as a bare trustee of the Burwood Trust, she is entitled to an indemnity for a Burwood Trust component of the costs incurred because the Burwood Trust funds formed part of the Estate Funds. In broad terms, Katrina calculates the Burwood Trust component by applying a percentage to the total costs she incurred. That percentage, of 11.76%, is derived from the value of the Burwood Trust as at 30 June 2010 ($303,245.25) and the value of the Estate Funds ($2,578,616.03) at that date. (Katrina contended that 30 June 2010 was the appropriate date because it was around the time she took on the role as executor and administrator of George's estate after Palmer J's orders in the 2005 Removal Proceedings).
3. As noted above, Katrina's claims for indemnity were set out at [16] of her 11 October written submissions and were elaborated on in Mr O'Brien's 26 September 2023 affidavit. They are also referred to in a further affidavit he swore on 24 November 2023. However, at the hearing, Katrina's counsel accepted that the amounts claimed in those documents were not correct, at least in respect of the percentage claims (for example, they were based on 10.23% or 10.66%).
4. On 13 December 2023, Katrina served a schedule setting out her revised Calculations of Indemnity Claims which calculates the percentage claims using 11.76% as the percentage factor. I have determined Katrina's claims to indemnity based on the amounts referred to.
5. As set out in the Indemnity Claims Schedule, Katrina claims indemnity from the Burwood Trust in the amount of $388,499.01, comprising 13 claims which I set out and deal with below.

Legal principles

1. The general principles governing a trustee's right of indemnity or exoneration were not in issue.
2. As the authors of Jacobs' explain at [21-02], citing Hardoon v Belilios [1901] AC 118 at 125: Equity […] took the view that a trustee should be saved harmless from the obligations attaching to the performance of the office as trustee and that this indemnity should be the price paid by the beneficiaries for the gratuitous and onerous services of trustees.
3. In Chief Commission of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226; [1998] HCA 4 at [47] (Buckle), the High Court approved the following passage from Scott on Trusts: Where the trustee acting within his powers makes a contract with a third person in the court of the administration of the trust, although the trustee is ordinarily personally liable to the third person on the contract, he is entitled to indemnity out of the trust estate. If he has discharged the liability out of his individual property, he is entitled to reimbursement; if he has not discharged it, he is entitled to apply the trust property in discharging it, that is, he is entitled to exoneration.
4. The trustee legislation recognises this right. Section 59(4) of the Trustee Act 1925 (NSW) provides: (4) A trustee may reimburse himself or herself, or pay or discharge out of the trust property all expenses incurred in or about execution of the trustee's trusts or powers.
5. When it comes to costs a trustee incurs in legal proceedings, r 42.35 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) provides: 42.25 Costs of trustee or mortgagee (1) Subject to subrule (2), a person who is or has been a party to any proceedings in the capacity of trustee or mortgagee is entitled to be paid his or her costs in the proceedings, in so far as they are not paid by any other person, out of the fund held by the trustee or out of the mortgaged property, as the case may be. (2) The court may order that the person's costs not be so paid if - (a) the trustee or mortgagee has acted unreasonably, or (b) in the case of a trustee, the trustee has in substance acted for his or her own benefit rather than for the benefit of the fund.
6. Consistent with the legislative provisions, the cases recognise that for a trustee to be entitled to an indemnity for payment of expenses, there must be a connection between the relevant expenses and the trust business. The cases formulate this requirement variously: the expense must have been incurred "in the course of the administration of the trust" (Buckle at [47]), in "performing the trust", (Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319 at 325), "in the discharge of the trustee's proper duties" (Adsett v Berlouis (1992) 37 FCR 201 at 212; O'Keeffe v Hayes Knight GTO Pty Ltd [2005] FCA 389 at [14]), "carrying out of the business of the trust" (Gatsios Holdings v Kritharas Holdings (in Liquidation) [2002] NSWCA 29 at [46] (Gatsios)), or "in the course of [the trustee's] office" (Re Grimthorpe [1958] Ch 615 at 623 per Danckwerts LJ).
7. In addition, a trustee is only entitled to an indemnity for costs and expenses that were properly incurred: In Re Beddoe; Downes v Cottam [1893] 1 Ch 547 at at 560 per Bowen LJ (Re Beddoe)). The meaning of "properly" has generated some division of judicial opinion in Australia: see Jacobs' at [21-07]; Gatsios; Nolan v Collie (2003) 7 VR 287; [2003] VSCA 39.
8. Section 63 of the Trustee Act provides that a trustee may seek any advice or direction from the Court in relation to the management or administration of trust property.
9. The cases refer to the risk that a trustee faces of paying costs personally if they commence or defend an action without the sanction of the Court. It has been said that a trustee should take no step in defence of a suit (and a fortiori in commencing a suit) without first taking judicial advice under s 63: Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar (2008) 237 CLR 66; [2008] HCA 42 at [74]. A trustee who acts in litigation without taking judicial advice does so at their own risk as to costs: Re Beddoe at 555. That may be so even if the trustee obtains a lawyer's advice, especially if that advice is later held to be erroneous or if the court holds it was unreasonable for the trustee to have relied on it: Re Beddoe at 555; Re Estate Late Chow Cho-Poon [2013] NSWSC 844 at [110] per Lindsay J; Re Doolan [2023] NSWSC 320 at [299] per Meek J.
10. In terms of the applicable uniform rule, failing to take judicial advice and instead relying only on a lawyer's advice alone may render unreasonable the decision to defend or commence proceedings, and therefore engage the exception in UCPR r 42.25(2)(a), depriving the trustee of a costs indemnity.

General comments and submissions

1. Something should be said at this point about Katrina's complicated position. Katrina is a potential beneficiary of the Burwood Trust (as a member of Hok's family) and, from 16 June 2009, she was the administrator of George's estate and trustee of the GT Trust. It was in her capacity as administrator/trustee in relation to George's estate and the GT Trust, respectively, that Katrina came under a duty in relation to the funds attributable to the Burwood Trust. Relevantly, in these proceedings, Katrina denied that the Burwood Trust remained in existence after July 1999. Accordingly, up to August 2022, on the position that Katrina herself adopted, she cannot have understood herself to be acting as trustee of the Burwood Trust.
2. In the present proceeding, Katrina submitted that the relevant test was not the trustee's intention, but rather whether the trustee benefitted the trust property by incurring the relevant expenses. On this argument, she contends that it is irrelevant that when she incurred the expenses she believed the Burwood Trust was determined and that she was acting as administrator of George's estate: this is because, she submitted, those expenses were in aid of proceedings which in fact safeguarded the Burwood Trust's property (even if Katrina had no such intention) and as such they were sufficiently connected with that trust to ground an indemnity.
3. In argument, the Trustees did not focus on the complexities of Katrina's position vis à vis the Burwood Trust. In the main, they adopted two lines of attack. The first was to argue that, for many of the expenses claimed, Katrina could offer no proof that she had come under an actual liability to pay. The Trustees (and Tzer along with them) argued that proof of a liability to pay and either actual payment or a subsisting debt was essential before awarding any indemnity.
4. The Trustees submitted, correctly, that proof of a liability to pay and either actual payment or a subsisting debt was essential before awarding any indemnity. For this proposition, the Trustees relied on a line of cases from outside the law of trusts dealing with indemnities generally, in particular, orders for costs in litigation, which operate as an indemnity in favour of the successful party: Wentworth v Rogers (2006) 66 NSWLR 474; [2006] NSWCA 145 at [126] per Basten JA; King v King [2012] QCA 81 at [7] per Chesterman JA.
5. Those principles may be accepted in the context of a trustee's indemnities. It is for the trustee to prove that there was a legal liability to pay the claimed amount, and that the trustee in fact paid or is still under an obligation to do so. To allow trustees to claim an indemnity absent such proof would risk the payment of unwarranted indemnities and, therefore, risk the maintenance of the trust and the interests of beneficiaries.
6. The second line of attack was to allege that, when incurring several of the claimed costs, Katrina was in breach of the trust. The Trustees said that Katrina was aware, well before the commencement of the 2020 proceedings, that there was an issue as to whether, of the funds she was responsible for administering (those of George's estate and the GT Trust), there was a portion (perhaps in the order of around $250,000) that was impressed with a trust (the Burwood Trust). That raises the concern that there was no attempt to hold separately any of the funds that it seems to have been acknowledged might fall within the corpus of the Burwood Trust if (contrary to the advice she later received) it had not already been determined. Katrina, on the other hand, says that what she knew as at 16 June 2009 when she became a bare trustee was that which had been found by Palmer J and the information in the (incomplete) documents then provided to her by Richard.
7. The Trustees say that Katrina owed both a duty to account and a duty of care as bare trustee from 16 June 2009; and they maintain that Katrina did not act reasonably and honestly. Emphasis is also placed by the Trustees on the fact that Katrina did not seek judicial advice as to the position in relation to the Burwood Trust at any stage.
8. With those matters in mind, I turn to address the claims sequentially.

Claim 1: Costs of the 2005 Removal Proceedings (1453/2005): $116,470.50

1. As noted already, the 2005 Removal Proceedings were commenced by Katrina and Lindsay for the removal of Richard as administrator of George's estate and trustee of the GT Trust (see [33]-[46] of Mr O'Brien's 26 September 2023 affidavit; [11] of Mr Daniel O'Brien's November affidavit).
2. Costs orders were made in favour of Katrina and Lindsay against Richard in relation to the 2005 Removal Proceedings. Costs were assessed and a costs judgment was entered in favour of Katrina and Lindsay against Richard for $990,395.42. Katrina says that no amount has been recovered by her and Lindsay as Richard went into bankruptcy (after the costs assessment process) on 10 September 2019.
3. Katrina's claim is for indemnity of $116,470.50, calculated as 11.76% of $990,395.42.
4. Katrina submits that the order made by Palmer J that Richard pay the bulk of her costs of those proceedings on an indemnity basis is the foundation of Katrina's right of indemnity. It is submitted that, in circumstances where there was a protracted costs assessment process followed by Richard's bankruptcy, which resulted in no costs recovery, Katrina (and the submissions here also make such a claim in respect of Lindsay) has a claim for indemnity for that proportion of the costs that corresponds with the proportion of the assets of George's estate and GT Trust attributable to the Burwood Trust funds, namely 11.67%.
5. Katrina submits that the costs incurred in these proceedings were costs incurred in ensuring the due administration of a trust, referring to the Estate Funds "including the component of those assets and funds that comprised the Burwood Trust" (see submissions at [13]). It is submitted that the proceedings were for the benefit of "the estate and the trust" (see submissions at [15]) but also that the purpose of the effect of the proceedings was to "seek due administration of the assets and funds of the GT Estate and the GT Trust including any asset and funds of the Burwood Trust held within the totality of those assets" ([21]). Katrina maintains that she is entitled, "on behalf of herself and Lindsay, to enforce and exercise the rights of indemnity available to those who act to preserve trust property from depredation by a delinquent, fraudulent trustee to be indemnified for the costs incurred in so acting out of the assets and funds of the trust" (see submissions at [21]).
6. Both the Trustees and Tzer contend that the costs of the 2005 Removal Proceedings ought not be borne out of the Burwood Trust funds.
7. They complain that it is unclear what facts were in issue in the 2005 proceedings (although I note that they should be able to be determined by reference to the judgment of Palmer J); or as to how the issues in the proceedings related to any conduct by Katrina (or Lindsay) associated with the Burwood Trust. Complaint is made that no costs agreements, tax invoices or proof of payment is before the Court in relation to the 2005 proceedings. The Trustees argue that liability for this amount to the legal representatives (if not discharged) would now be statute barred. It is also noted that there were no orders for the costs to be paid out of the income or capital of the Burwood Trust notwithstanding that the parties knew of the existence and terms of the trust before 7 July 2010.
8. The Trustees say that, to the extent that these proceedings relate to the identity of the legal personal representative of George's estate (and hence the identity of the bare trustee of the Burwood Trust) there should be no recourse by way of indemnity or exoneration to the income and/or capital of the Burwood Trust because a trustee ought be indifferent as to the identity of the trust (citing Application of Uncle's Joint Pty Ltd ACN 148 176 792 [2014] NSWSC 321 per Brereton J at [30]).
9. Similarly, Tzer notes that in the proceedings determined by Palmer J in 2012 (Tjiong v Tjiong), his Honour noted that Katrina and Lindsay no longer sought relief founded on allegations of breach of trust by Richard in investing or failing to invest assets of George's estate and of the GT Trust (see at [26]). Tzer argues that what occurred was that Katrina and Lindsay sought relief concerning the GT Trust and George's estate (not the Burwood Trust, there being no relief sought in relation to it) and then abandoned the relief relating to the alleged breaches of trust "which may otherwise have been construed as conduct protecting trust assets (that is, improper investment of funds by Richard Tjiong)".
10. Thus, Tzer also submits that the proceeding related primarily to the identity of the trustee. Further, Tzer refers to the reasoning of Fry J in Fane v fane (1870) 13 Ch D 228 (on which decision Katrina had relied) at 231, to the effect that where very serious allegations of a gross breach of trust has been struck out by the plaintiff and the plaintiff has abandoned all the relief which he claimed as founded on them, the plaintiff should pay all the costs occasioned by those allegations. Tzer submits that the same reasoning ought here apply, noting that Palmer J had observed that many pages of the amended statement of claim and a considerable amount of evidence (though very little court time) had been occupied by the abandoned allegations (see Tjiong v Tjiong at [26]).
11. Determination: I refuse Katrina's claim for indemnity in relation to the 2005 Removal Proceedings.
12. In the absence of any costs agreement, tax invoices that make up the claim or receipts for payment, I am not satisfied that Katrina has established an entitlement to indemnity as she has not proved she has paid the costs claimed or that she is still liable to pay them. I accept the Trustees' submission that liability for payment of costs incurred in relation to the 2005 Removal Proceedings would now be statute barred.
13. I also do not accept Katrina's submission that she is entitled to an indemnity for 11.76% of the costs incurred because the costs incurred in relation to the 2005 Removal Proceedings ensured the due administration of a trust (referring to the George estate and GT Trust and the Oninama Trust) that included the component of those assets and funds that comprised the Burwood Trust and benefitted the Burwood Trust.
14. Katrina's right to indemnity is not established simply on the basis that the 2005 Removal Proceedings may have benefitted the Burwood Trust. The real question is whether the costs were properly incurred by Katrina in performing her role as trustee of the Burwood Trust. The 2005 Removal Proceedings were commenced by Katrina (and Lindsay) as a beneficiary under George's Will seeking the removal of Richard effectively from the administration of George's estate primarily in her own personal interest. Further, she would have incurred the costs in relation to the 2005 Removal Proceedings irrespective of whether the Burwood Trust existed or not.
15. The 2005 Removal proceedings were not about the Burwood Trust. In my view, the costs Katrina incurred in those proceedings were not incurred by her as part of or in connection with the proper performance of her duties or exercise of her powers as trustee of the Burwood Trust.

Claim 2: Net costs of proceedings 2010/406799 in the District Court: $599.92

1. These District Court proceedings were commenced by Katrina and related to her complaint as to the due administration of George's estate and the GT Trust ([47]-[48] of Mr O'Brien's September 2023 affidavit; [11] of Mr O'Brien's November affidavit). Katrina identifies these proceedings as related to a claim by her against Richard for recovery of moneys under restitutionary claims flowing from the findings and orders made in the 2005 Removal Proceedings. A statement of claim was filed on 7 December 2010 in those proceedings. A bill of costs tax invoice was issued to Katrina in relation to those proceedings in the amount of $64,300.75 including disbursements and GST (see Ex DOB-1 pp 213-220).
2. Katrina claims a proportion of those costs on the basis that the assets the subject of this administration claim included assets found to be assets of the Burwood Trust.
3. The Trustees and Tzer say that they have not been provided with a costs agreement or proof of payment in respect of these costs.
4. Further, Tzer submits that it is unclear from the statement of claim filed in these proceedings how they relate to conduct by Katrina as trustee of the Burwood Trust (or Lindsay as a beneficiary) for the protection of trust assets. Tzer also notes that the statement of claim pleads that the proceedings are brought by Katrina in her capacities as administrator of George's estate and as trustee of the GT Trust (with no pleading that they were brought in her capacity as trustee of the Burwood Trust).
5. Accordingly, the Trustees and Tzer maintain that Katrina should not be indemnified for the costs incurred in relation to these proceedings.
6. Determination: I refuse Katrina's claim for indemnity in relation to the costs of proceedings in the District Court (2010/406799).
7. This is for the same reasons as those in relation to Katrina's claim for indemnity in respect of the 2005 Removal Proceedings. I am not satisfied that Katrina has established an entitlement to indemnity as she has not proved she has paid the costs claimed or that she is still liable to pay them. In my view, the costs Katrina incurred in these proceedings were also not incurred by her as part of or in connection with the proper performance of her duties or exercise of her powers as trustee of the Burwood Trust.

Claim 3: Costs of Alternate Will Proceedings 2011/098337 in this Court: $99,429.10

1. This claim relates to costs of the "fabricated" will in relation to which Soei sought probate (see [52]-[59] of Mr O'Brien's September 2023 affidavit); [11] of Mr O'Brien's November affidavit.
2. Katrina and Lindsay were parties to these proceedings as recorded in the judgment of White J in Chang v Tjong; Estate of Hok Njian Tjiong [2011] NSWSC 1614 (Ex DOB-1 pp 352-368).
3. Katrina claims indemnity for the whole of these costs because she says that this matter related solely to the Burwood Trust. A bill of costs was prepared in the amount of $99.429.10 (see Ex DOB-1 pp 369-374).
4. Katrina says that as bare trustee (from 16 June 2009) she had an obligation to protect and maintain the trust and hence is entitled to an indemnity for the costs incurred in this. (A similar submission is made in relation to claims 4, 5, 6, 7 and 9.)
5. The Trustees complain that without the pleadings there is no evidence of the capacity in which Katrina was involved in these proceedings (whether as trustee of the Burwood Trust or not) and that the relevance of the proceedings from the perspective of the Burwood Trust seems to be that they related to the terms of the trust and whether the terms were revoked. Tzer points to [9] of White J's judgment in these proceedings where his Honour noted that Katrina had elected to be joined to the proceedings and entered an appearance in her capacity as executor of George's estate. Tzer emphasises that there is no mention of Katrina acting in her capacity as trustee of the Burwood Trust or any document to indicate that she acted in her capacity as anything other than the executor of the estate of George.
6. The Trustees refer to Re Dion Investments (2014) 87 NSWLR 753; [2014] NSWCA 367 per Barrett JA at [94], with whom Beazley P at [1] and Gleeson JA at [117] agreed, as to it being the trustee's function to take the terms of a trust as it finds them. The Trustees argue that an indifferent and impartial trustee would not have prosecuted the proceedings where there were other contradictors that could have done so (referring to Brereton J's decision in Application of Uncle's Joint at [31] as to the duty of the trustee to remain neutral). As a result, it is said that the costs of defence of these proceedings ought not be taken into account for the purpose of any indemnity out of the Burwood Trust.
7. Tzer similarly submits that Katrina ought not be indemnified in respect of the costs incurred in relation to these proceedings. Tzer also notes that at [19] of his Honour's judgment, reference is made to a submission by Katrina to the effect that the evidence of the document examiner (that George's signature was probably forged) cast doubt on the authenticity of the letter that Palmer J had accepted were genuine, a submission that Tzer argues is not consistent with conduct expected from a trustee engaged in the protection and preservation of trust assets in that it essentially calls into question the very creation of the Burwood Trust.
8. Determination: I refuse Katrina's claim for indemnity in relation to the Alternate Will Proceedings.
9. While these proceedings related to the Burwood Trust, I am not satisfied that Katrina has established that the costs were incurred in carrying out her duties as trustee of the Burwood Trust in circumstances where she elected to join the proceedings and appeared in her capacity as the executor of George's estate and there were other contradictors who could have taken action, as the Trustee submits. As Katrina did not seek judicial advice in her capacity as trustee of the Burwood Trust before taking steps to join and seek to defend the proceedings, she was also at risk that she would not recover her costs.

Claim 4: Costs of responding to correspondence from Richard Tjiong: $4,686.00

1. Katrina claims indemnity for the costs of responding to correspondence issued in 2014 by Richard's solicitor, Peter Kennedy, which Katrina says was solely about the Burwood Trust (see [64]-[66] of Mr O'Brien's September affidavit; [11] of Mr O'Brien's November affidavit), in the amount of $4,686.
2. The Trustees in oral submissions accepted that claim 4 is an appropriate claim for indemnity. Tzer maintains that the claim ought not be accepted, noting that no costs agreement or receipt showing payment of the tax invoice was provided.
3. Determination: In light of the Trustees' concession and the subject matter of the correspondence, I allow this claim for $4,686.

Claim 5: Fees paid to Macquarie Bank for missing statement pages: $350

1. This claim relates to costs incurred in obtaining missing statement pages for the MacBank Account and is for $350 (see [68] of Mr O'Brien's September affidavit; [11] of Mr O'Brien's November affidavit). A copy of Katrina's cheque for that amount is at DOB-1 pp 377-378.
2. The Trustees accepted at the hearing on 18 October that claim 5 is an appropriate claim for indemnity and Tzer did not contest it.
3. Determination: In light of the Trustees' concession and the evidence that indicates that Katrina requested the statement as part of her efforts to determine what happened to the Burwood Trust, I allow this claim for $350.

Claim 6: Fees paid to Nevett Ford, Lawyers of Ballarat for advice about the Burwood Trust: $5,569.30

1. In March 2015, Katrina obtained advice from Nevett Ford in relation to the Burwood Trust for which a tax invoice dated 31 March 2015 for $5,569.30 was rendered (see [69] of Mr O'Brien's September affidavit; [11] of Mr O'Brien's November affidavit and ExAOB3 pp 339-342). A receipt was issued for this amount (see Ex DOB-1 pp 379-385).
2. Katrina says she is entitled to 100% of the cost of this advice as the advice is referrable to the Burwood Trust only.
3. The Trustees and Tzer submit that this advice was for the personal benefit of Katrina and that the costs of the advice ought not be the subject of an indemnity out of the Burwood Trust.
4. Determination: I refuse Katrina's claim for indemnity in relation to the Nevett Ford advice.
5. I accept the Trustees' and Tzer's submission that the advice obtained by Katrina was for her personal benefit, noting the advice was as follows: [11] I am not excited by the suggestion that you proceed with the application for a judicial opinion. As I understand the New South Wales procedure an application for a judicial opinion does not effectively pass to the Court the responsibility of exercising the power of appointment. An application for a judicial opinion is an application brought by a trustee asking the Court to give its opinion as to whether or not a proposed exercise by that trustee of his/her powers is a valid exercise of those powers. In the current instance if you were to bring an application for a judicial opinion you are effectively conceding that George did not exercise the power of appointment during his lifetime, and that the trust funds remained mingled with his personal assets at the date of his death. … [13] … I think it is best that you simply retain the money. If proceedings are issued you can make an assessment at the time of the likely prospect of those proceedings based on the way the claim is framed by the Plaintiff. You would reasonably expect that any such claim could be settled for substantially less than the full amount claimed.

Claim 7: Fees for advice from counsel on the Burwood Trust and s 63 of the Trustee Act: $22,000.00

1. This claim relates to fees for advice sought by Katrina in 2016 from counsel in relation to the alleged trust in respect of the proceeds of sale of the Burwood Unit and the current status of the trust of the proceeds of sale of that unit, and proposed proceedings for judicial advice pursuant to s 63 of the Trustee Act (see [70] of Mr O'Brien's September affidavit; [11] of Mr O'Brien's November affidavit). A tax invoice from counsel (Michael Evans) dated 10 June 2016 for $27,500 inclusive of GST is in evidence (see Ex DOB-1 pp 386-455).
2. Katrina's claim is for $22,000. She says that she is entitled to 100% indemnity for her costs as they relate solely to the Burwood Trust.
3. The Trustees submits they were not provided with a costs agreement or proof of payment and that the advice did not take into account the findings of Palmer J in Chang v Tjiong No 1. They also submit that the advice was for Katrina's benefit in her personal capacity, rather than in any trustee capacity.
4. Tzer (who adopts the written submissions of the Trustees, which contended that the claim ought not be allowed) submits that the claim ought not be accepted, noting that no costs agreement or receipt for payment has been provided.
5. Determination: I allow Katrina's claim for indemnity for $22,000 in relation to the advice from counsel on the Burwood Trust and s 63 of the Trustee Act.
6. The advice was directed to whether judicial advice should be sought in relation to the Burwood Trust. While some aspects were not consistent with Palmer J's findings, I am satisfied that the costs were incurred by Katrina as part of or in connection with the proper performance of her duties or exercise of her powers as trustee of the Burwood Trust. I do not consider that it is necessary for proof of payment in order for a right of indemnity to arise and the invoice satisfies me that there is a current liability, notwithstanding the absence of a cost agreement for that amount.

Claim 8: Costs of proceedings 2017/222385 in the District Court: $13,805.73

1. This claim (see [49] of Mr O'Brien's September affidavit; [11] of Mr O'Brien's November affidavit) relates to the cost of proceedings in the District Court relating to the recovery of costs orders made against Richard in the 2005 Removal Proceedings in this Court. Costs were assessed at $13,805.73, including the costs of the costs assessment (see Ex DOB-1 pp 456-457).
2. Katrina seeks to recover all of these costs and claims $13,805.73. These costs (as with claims 1 and 13) which relate to the 2005 Removal Proceedings are said to be linked to the due administration of George's estate and GT Trust (which include assets of Burwood Trust) and Katrina claims an indemnity on the same basis.
3. The Trustees note that they have not been provided with a costs agreement or proof of payment. Tzer repeats his submissions in relation to the 2006 Removal Proceedings costs in respect of this claim for indemnity.
4. Determination: I refuse Katrina's claim for indemnity in relation to the costs of these District Court proceedings. This is because the costs relate to the costs of the 2005 Removal Proceedings. My reasons in relation to claim 1, concerning the 2005 Removal Proceedings, also apply to this claim. I also note that unlike claim 1, this claim seek full indemnity for the costs incurred, which is another reason why I refuse this claim.

Claim 9: Fees for responding to letter from Griffin Lawyers of Adelaide: $25,850,00

1. This claim relates to the costs of responding (from December 2017 to January 2018, in particular a letter dated 16 January 2018) to letters issued by Griffin Lawyers of Adelaide, acting for Soei, regarding the Burwood Trust (see [72]-[74] of Mr O'Brien's September affidavit; [11] of Mr O'Brien's November affidavit). The costs amount to $25,850 including disbursements and GST (see Ex DOB-1 pp 458-510).
2. Katrina claims indemnity for the whole of these costs from the Burwood Trust on the basis that the correspondence relates solely to matters concerning the Burwood Trust and threatened legal proceedings.
3. The Trustees and Tzer submit that Katrina ought not be indemnified for this expense. They note that Katrina has not provided a costs agreement or proof of payment for these costs. Further, they argue that statements made by Katrina's solicitors in that correspondent (see Ex DOB-1 p 393) as to the "so-called Burwood Trust" having been extinguished by a final distribution of those funds were inconsistent with Palmer J's judgment in Chang v Tjiong and were designed to put an end to any further enquiry as to the Burwood Trust funds. They submit that the "intended outcome" was for Katrina to avoid having to pay over any funds that would otherwise be part of the Burwood Trust assets (referring to [169] of the letter) and noting that this "strategy" was set out in the advice provided by Katrina's counsel on 8 September 2015.
4. Tzer also notes that the letter makes no mention of any expense incurred by Katrina that would form a basis for a claim of indemnity.
5. Determination: I accept Katrina's claim for indemnity in respect of the fees for responding to Griffin Lawyers' letter.
6. The substance of O'Brien's letter relates to the Burwood Trust. While the letter ultimately contended that the trust had terminated and Katrina was not the trustee, Katrina also acknowledged in that letter that she had an obligation as the bare trustee to investigate the trust. On that basis, I am prepared to accept that the costs were incurred by Katrina as part of or in connection with the proper performance of her duties or exercise of her powers as bare trustee of the Burwood Trust.

Claim 10: Costs of proceedings 2019/061978 in this Court: $8,840.38

1. This claim relates to the proceedings commenced by Richard against Katrina in this Court (seeking to set aside the orders made in the 2005 Removal Proceedings), which were dismissed by Rein J (see [75]-[80] of Mr O'Brien's September affidavit; [11] of Mr O'Brien's November affidavit) (see Ex DOB-1 pp 511-555). The costs invoiced on 16 July 2019 were in the amount of $75,173.30 including disbursements and GST.
2. Katrina claims a proportion of the costs of $8,840.38, being 11.76% of the costs incurred of $75,173.30.
3. Katrina says that this claim (and claim 12) is for a share of the costs of proceedings brought against her and Lindsay seeking to set aside Palmer J's judgment on the ground of fraud and that these claims went to the heart of the proceedings for due administration and hence are an extension of the 2005 Removal Proceedings.
4. Both the Trustees and Tzer note that they have not been provided with a costs agreement or proof of payment. Further, they submit that the pleadings filed in this (and the proceeding the subject of claim 12) were filed after Katrina had represented to Soei in the letter dated 16 January 2018 that the Burwood Trust had been distributed and determined by the July 1999 payments to Lindsay. It was submitted that this circumstance is against the proposition that, at the time the legal costs were incurred by Katrina, she did so under a contemporaneous belief that the Burwood Trust was still in existence.
5. Tzer also argues that the assertion that these costs were incurred in Katrina's capacity as trustee of the Burwood Trust is unpersuasive in the light of the assertion by Katrina that there was "no trust and no trust fund", as is any claim that the action Katina took in respect of this (or the proceeding in claim 12) was done to protect or preserve Burwood Trust assets (when the position she had adopted was that the trust no longer existed).
6. Accordingly, it is submitted that Katrina ought not be indemnified for these costs.
7. Determination: I refuse Katrina's claim for indemnity in relation to a proportion of the costs of proceedings 2019/061978. This is for the reason these proceedings relate to the 2005 Removal Proceedings. My reasoning in relation to claim 1 concerning the 2005 Removal Proceedings applies here. I am not satisfied that these costs were incurred by Katrina as part of or in connection with the proper performance of her duties or exercise of her powers as trustee of the Burwood Trust. This is particularly as, by this time, Katrina's stated position was that the Burwood Trust had determined and she had disclaimed her role as trustee. It seems to me that Katrina was acting in these proceedings in her personal interest, rather than as trustee of the Burwood Trust.

Claim 11: Costs of proceedings 2019/211113 in this Court: $70,576.00

1. This claim relates to the further proceedings commenced by Richard against Katrina and Lindsay for an alleged breach of duty in relation to the Burwood Trust seeking an order for accounts and her removal as trustee (see [81]-[84] of Mr O'Brien's September affidavit; [11] of Mr O'Brien's November affidavit; Ex DOB-1 pp 556-570). The proceedings were dismissed by Parker J as Richard had been declared bankrupt. The costs amounted to $70,576.00 inclusive of disbursements and GST.
2. Katrina claims indemnity for the whole of these costs from the Burwood Trust on the basis that the proceedings related solely to the Burwood Trust.
3. The Trustees note that they have not been provided with a costs agreement or proof of payment. Tzer adopts the Trustees' submissions and again points to the correspondence to Soei asserting that there was no trust and no trust fund. Tzer says that the submission by Katrina (see [84] of Mr O'Brien's September affidavit) that the action taken in seeking to have these proceedings summarily dismissed (on the basis that Richard was a bankrupt) constituted action to protect the trust property and to vindicate the rights attaching to it is inconsistent with the assertions made to Soei that there was no trust and no trust fund.
4. It is submitted that Katrina is not entitled to an indemnity in respect of these costs.
5. Determination: I refuse Katrina's claim for indemnity in relation to these costs. This is for two reasons.
6. First, Katrina was at risk of paying costs herself in circumstances where she took steps to defend the proceedings without obtaining judicial advice.
7. Second, and although these proceedings relate to the Burwood Trust, I am not satisfied that these costs were incurred by Katrina as part of or in connection with the proper performance of her duties or exercise of her powers as trustee of the Burwood Trust when her stated position at this time was that the Burwood Trust had determined and she had disclaimed her role as trustee.

Claim 12: Costs of proceedings 2019/278508 in this Court: $17,358.94

1. This claim relates to the third of the proceedings commenced by Richard in this Court in 2019 against Katrina and Lindsay, in which Richard sought to set aside orders and findings made by Parker J in the 2005 Removal Proceedings (see [85]-[89] of Mr O'Brien's September affidavit; [11] of Mr O'Brien's November affidavit) (see Ex DOB-1 pp 571-632). An invoice was rendered on 10 November 2021 in the amount of $147,610.00 including disbursements and GST for the costs of these proceedings.
2. Katrina claims indemnity for the amount of $17,358.94, being 11.76% of the costs of those proceeding.
3. The Trustees and Tzer repeat their submissions in relation to claim 10 and again note that they have not been provided with a costs agreement or proof of payment.
4. Determination: I refuse Katrina's claim for indemnity in relation to a proportion of the costs of proceedings 2019/278508. This is for the same reasons for refusing Katrina's claim in respect of a proportion of the costs of defending proceedings 2019/061978 (claim 10).

Claim 13: Costs of engaging Somerville Legal, insolvency specialists: $2,913.14

1. This claim relates to the costs of engaging insolvency specialises in an attempt to recover costs from Richard (see [90]-[91] of Mr O'Brien's September affidavit; [11] of Mr O'Brien's November affidavit) (see Ex DOB-1 pp 633-655). The costs total an amount of $24,771.60.
2. Katrina claim is for $2,913.44, being 11.76% of those costs. Again, this claim is said to relate to the 2005 Removal Proceedings and she is entitled to indemnity because the costs are linked to the due administration of George's estate and GT Trust, which include assets of Burwood Trust.
3. The Trustees and Tzer notes that no cost agreement or receipt demonstrating payment has been made; and argue that Katrina ought not be indemnified in respect of this claim (repeating the submissions made in relation to the claim for indemnity for costs incurred in the 2005 Removal Proceedings).
4. Determination: I refuse Katrina's claim for indemnity in relation to the proportion of the costs of engaging Summerville Legal. This is for the reason the advice relates to 2005 Removal Proceedings. My reasoning in relation to the 2005 Removal Proceedings applies here. I am not satisfied that these costs were incurred by Katrina as part of or in connection with the proper performance of her duties or exercise of her powers as trustee of the Burwood Trust. This is particularly as her stated position at this time was that the Burwood Trust had determined and she had disclaimed her role as trustee.

Conclusion

1. In conclusion, I have determined that Katrina is entitled to indemnity from the Burwood Trust in relation to four of her 13 claims, totalling $52,886, comprising her claim for fees paid to Macquarie Bank for missing bank statements ($350), costs in responding to correspondence from Richard about the Burwood Trust in 2014 ($4,686), the legal advice from counsel in relation to judicial advice and the Burwood Trust in 2016 ($22,000) and the cost of responding to the letter from Griffin Lawyers ($25,850).

Conclusion, costs and orders

1. I have concluded that, the value of the corpus of the Burwood Trust is $691,318.11 as at 12 December 2023. I have also determined that Katrina is entitled to indemnity from that amount in the sum of $52,886.
2. Thus, I conclude that the net amount of the corpus of the Burwood Trust as at 12 December 2023 is $638,432.11. This is the amount that should be paid by Katrina to the Trustees and I will make an order to that effect.
3. As for costs, as between Tzer and Katrina, given the outcome, I see no reason for costs not to follow the event and will order Katrina to pay Tzer's costs. Katrina failed to establish an entitlement to indemnity that she asserted was "clearly in excess" of the amount now represented by the assets of the Burwood Trust and Tzer has, in effect, succeeded in obtaining the relief he sought when he commenced these proceedings in 2020.
4. The Trustees seek costs as against Katrina on the basis that had Katrina in fact accounted for the Burwood Trust then the exercise undertaken by the Trustees would not have been required. However, if not, then the Trustees seek costs on the indemnity basis out of the fund pursuant to r 42.25 of the UCPR.
5. I do not consider that Katrina should pay the Trustees' costs in addition to paying Tzer's costs. The orders that were made in the Judgment, which were the subject of discussion between the parties, provide that the Trustees are to be indemnified for their costs from the amount that was determined to be paid to them as representing the corpus of the Burwood Trust on the trustee basis. Accordingly, I will order that the Trustees be paid costs from the Burwood Trust on an indemnity basis pursuant to r 42.25 of the UCPR.
6. For these reasons, I make the following orders: 1. Order that the First Defendant pay to the Second and Third Defendants as the trustees of the Burwood Trust the amount of $638,432.11 (Amount), representing the corpus and income of the Burwood Trust from the date of the receipt of the proceeds of sale of xx Street, Burwood in the state of New South Wales (Burwood Unit) being 31 December 1996 (the date of receipt of the final payment with respect to the proceeds of sale of the Burwood Unit) to 12 December 2023 after deduction of the First Defendant's indemnity claims as determined by this Court. 2. The First Defendant pay the Plaintiff's costs of and in relation to the Second and Third Defendants' notice of motion filed on 1 September 2023 and the proceedings since that date on the ordinary basis, as agreed or assessed. 3. The Trustees be indemnified for their costs in relation to their role as Trustees and in relation to these proceedings from the Amount on the indemnity basis pursuant to r 42.25 of the Uniform Civil Procedure Rules 2005 (NSW).

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 February 2024