Wang v Cai

Parties

1. The first plaintiff (Ms Wang) is the sole director of the second plaintiff (Haixin), a company described by the plaintiffs as an investment vehicle through which (and this appears not to be disputed) the plaintiffs have invested around $5.7 million in the Burwood Development.
2. The first, third, fourth and sixth defendants (to whom I will refer, collectively, as the Zhang defendants) comprise two individuals (the first defendant, Ms Wan Hao (Michelle) Cai; and the third defendant, Mr Yi Guang (Joseph) Zhang), who are related by marriage (being sister-in-law and brother-in-law, respectively) and the respective companies associated with those two individuals (the fourth defendant, Mayland Pty Ltd (Mayland), of which Ms Cai is the sole shareholder and director; and the sixth defendant, Aqua Blu Swimwear Pty Ltd (Aqua Blu), of which Mr Zhang is a director and the sole shareholder). (I pause here to note that Ms Cai's name is spelt variously in the plaintiffs' submissions as Ms Cai and Ms Çai. I have adopted in these reasons the spelling on the Sale Process Side Deeds dated 10 June 2021 and 21 July 2021 - see below, as that seems to be the spelling used by Ms Cai herself.)
3. The second and fifth defendants (to whom I will refer, collectively, as the Fang defendants) are Ms Yun Xia (Angela) Fang and the company of which she is the sole director and shareholder, Ozjian Trading Pty Ltd (Ozjian).
4. At the time of the transactions which are the subject of the underlying dispute, Ms Cai was (as I understand it) a licensed real estate agent, working in Burwood using a licensee corporation (Leader Properties Investment Pty Ltd). The plaintiffs say that Ms Fang held at those times a certificate of registration as an assistant agent under s 10 of the Property and Stock Agents Act 2002 (NSW) and was required by s 11 of that Act to be employed and supervised by a licensed real estate agent. The plaintiffs say that Ms Fang was employed in Ms Cai's office.
5. The Zhang defendants and the Fang defendants are separately represented in the proceeding and on the present application; and are the only active defendants on this application.
6. The seventh defendant is Giant Project Group Pty Ltd (Giant). Giant was incorporated on 25 August 2015, with its then sole director being Mr Zhang. In September 2015, Mr Farah Elias (who is associated with other entities relevant to the present dispute, as I explain shortly), became a director of Giant. Mr Zhang ceased to be a director of Giant on 11 November 2020.
7. Giant is the trustee of the Everspring Develop Group Unit Trust (to which I refer below); the owner of the two sites in Burwood the subject of the Burwood Development (the Burwood Road Site and the adjacent Burleigh Street Site); and (in its capacity as trustee of the said Trust) the vehicle through which the Burwood Development is being conducted.
8. Giant was represented on the present application by its solicitor, Mr Hudson, but took no active role in the hearing of the application. Giant's position is that it neither consents to nor opposes the relief here sought against it.
9. The eighth defendant is VIP Sale Pty Ltd (VIP Sale), the trustee of the Burwood 168 Unit Trust (to which I refer below). VIP Sale was incorporated in 2011 (by Mr Zhang and a relative of Ms Cai). Mr Zhang was, by 2 October 2015, the sole director of VIP Sale, and remains so. Ms Wang (at her request) was appointed a director of VIP Sale on 30 March 2020, but resigned as a director on 7 August 2020. Mr Zhang's position is that he is unable to resign as a director of VIP Sale in the absence of any other person willing to assume the role (see s 203AB of the Corporations Act 2001 (Cth) (Corporations Act). I was taken to correspondence in which the Zhang defendants have suggested to Ms Wang that she nominate a candidate for directorship of VIP Sale, but it appears that she is not willing (or able) so to do. Ms Cai's husband (Mr Xiang (John) Zhou) was the company secretary of VIP Sale from late 2015 through to 25 March 2020.
10. VIP Sale has taken no active role (and was not represented) on the present application and has filed a submitting appearance in the proceeding. It is said to be without funds to meet legal expenses and is therefore unable to take any role in the proceeding (see letter dated 24 December 2020 from its solicitors, Henry Williams Lawyers).
11. The two remaining defendants in the substantive proceeding (the ninth defendant, Diamond Bay Developments Pty Ltd (Diamond Bay) and the tenth defendant, PJE918 Pty Ltd (PJE918) are entities associated either with Mr Elias or a member of Mr Elias' family. Those defendants were not joined as respondents to the 13 April 2021 notice of motion and have taken no role on the present application.

Trusts

1. As adverted to above, there are two unit trusts which feature in the present application: the Everspring Develop Group Unit Trust, through which the Burwood Development is being conducted; and the Burwood 168 Unit Trust (being the trust in which Haixin holds units and the investment vehicle through which Haixin and various of the defendants invested in the Burwood Development). It does not appear to be disputed that no business is carried on through the Burwood 168 Unit Trust, it being no more than the vehicle through which investments were made into the Everspring Develop Group Unit Trust for the purposes of the Burwood Development.
2. Pausing here, the plaintiffs have raised questions on the present application (and include such questions in the interrogatories they seek to administer) as to why the two-tiered investment structure was adopted in the first place (rather than introducing the plaintiffs directly into Giant and the Everspring Develop Group Unit Trust). The plaintiffs have postulated that this was to keep Haixin at arms' length from the primary vehicle for the development and to enable the fourth to sixth defendants to leverage their investment off the plaintiffs' contribution, as part of what they describe as a cynical deception of Ms Wang and her company, Haixin. The position of the Zhang defendants is that such speculation is inappropriate. Insofar as the plaintiffs in their submissions (which it must be said are expressed in rather emotive language) have characterised conduct of the defendants as dishonest or the like, the Zhang defendants say that such characterisations and assertions are disputed and that they depend upon questions of fact which are issues for, and can only be resolved at, trial. Subject to what I say in due course as to the application for discovery or the provision of an account of the dealings in relation to the trusts based on the general principles relating to administration of trusts, I broadly accept that proposition.

Everspring Develop Group Unit Trust

1. The Everspring Develop Group Unit Trust was established pursuant to a Trust Deed dated 28 September 2015 between Giant, as trustee, and each of VIP Sale, Hai Tao Pty Ltd (Hai Tao) and Diamond Bay, as the initial unitholders. The Trust Deed appears to have been prepared based on the same precedent as the Burwood 168 Unit Trust Deed (a form of trust deed apparently acquired by VIP Sale's accountant, Ms Xueling (Sally) Huang of HL Tax Services from a law firm, Battalion Legal Pty Ltd - seemingly akin to the purchase of an "off the shelf company").
2. I interpose here to note that the plaintiffs dispute the accuracy of dates appearing on a number of executed documents, including this Trust Deed, (and, at least in relation to one document - the so-called "30 September minute" - the plaintiffs dispute the veracity of the document itself). The plaintiffs have expressed their concern to establish the precise chronology of events (this being a reason put forward by them for seeking production of documents and disclosure of information at this stage of the proceeding) in order to enable the foreshadowed amended pleading to be comprehensive (and to avoid the need for later further amendment to the pleadings), as to which I say more in due course. Suffice it at this stage to say that, although complaint is made by various of the defendants as to the timing of the present application, the plaintiffs maintain that it is consistent with the overriding statutory mandate for the just, quick and cheap resolution of the real issues in dispute (see s 56 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) for the plaintiffs now to be provided with the documents and information they seek in order to be able efficiently to plead their claim (and they resist the contention by the defendants that, in effect, they are here impermissibly fishing around to find additional claims).
3. The shareholding of Giant is held by the same entities that are unitholders in the Everspring Develop Group Unit Trust and in the same proportions as they hold units in that trust.
4. Initially, the units in the Everspring Develop Group Unit Trust were held: as to 40%, by VIP Sale (in its capacity as the trustee of the Burwood 168 Unit Trust); as to 33%, by Diamond Bay (as noted above, a company associated with Mr Elias); and, as to 27%, by Hai Tao, a company associated with a Chinese investor, Mr Shunxiang Rong.
5. Presently, the units in the Everspring Develop Group Unit Trust are held: as to 40%, by VIP Sale (in its capacity as the trustee of the Burwood 168 Unit Trust); as to 33%, by Diamond Bay; as to 18%, by PJE918; and, as to 9%, by an entity not (yet) joined as party to the proceeding, Clarence Property Group Pty Ltd (Clarence Property Group), which is a company associated with Mr Zhang and Ms Cai.
6. The circumstances in which this change in the unitholdings occurred are the subject of some dispute in the substantive proceeding, as I explain below. As I understand it, the change came about because, in late 2018, Hai Tao wished to withdraw from the Burwood Development, which resulted in the divestment of its units in the Everspring Develop Group Unit Trust. Two-thirds of Hai Tao's units were acquired by PJE918 and the remaining third by Clarence Property Group. Following Hai Tao's withdrawal from the project, the unitholdings in the Everspring Develop Group Unit Trust were therefore as set out in [22] above.
7. Complaint is made by the plaintiffs that the acquisition of the Hai Tao units (by interests associated with Mr Elias, Mr Zhang and Ms Cai) occurred without notice to the plaintiffs (and without giving them an opportunity to participate), despite the existence of pre-emption clauses in the respective Trust Deeds. (The Zhang defendants, however, assert that Ms Wang was informed - through Ms Fang - of Hai Tao's inability to continue in the project and the proposal for the acquisition of Hai Tao's units and entry into costs sharing arrangements; which simply highlights the difficulty of embarking on any consideration of the factual issues in dispute at this stage.)
8. At or around the same time as Hai Tao's units were acquired by PJE918 and Clarence Property Group, a Unitholders Deed of Agreement dated 7 September 2018 was entered into by the unitholders in the Everspring Develop Group Unit Trust (i.e., VIP Sale, Diamond Bay, PJE918 and Clarence Property Group) (the 2018 Unitholders Deed). The 2018 Unitholders Deed provided that unitholders would be responsible for certain additional expenses and holding costs of the project in the proportions of 35% (as to Diamond Bay and PJE918) and 65% (as to VIP Sale and Clarence Property Group); and that, upon completion, the proceeds of the development would be divided in the proportions of 50% (as to Diamond Bay and PJE918) and 50% (as to VIP Sale and Clarence Property Group). As already noted, PJE918 is an entity associated with Mr Elias. Clarence Property Group is an entity associated with Mr Zhang and Ms Cai.
9. The plaintiffs make various complaints as to the circumstances in which Hai Tao's units in the Everspring Develop Group Unit Trust were acquired by PJE918 and Clarence Property Group, including as to the validity of the 2018 Unitholders Deed. Relevantly, the plaintiffs say that the 2018 Unitholders Deed substantially altered, to the detriment of VIP Sale, the provisions of a Management Agreement that had earlier been entered into in relation to the project (see below at [41]). The plaintiffs say that, although the unitholders in VIP Sale (of which Haixin was one) were named as parties to this Deed, it was not presented to or executed by the plaintiffs (and, in the plaintiffs' case, it is said to be of no effect because necessary parties have never executed it and because informed consent thereto was not obtained).
10. The plaintiffs also raise issues concerning matters referred to in the 2018 Unitholders Deed (such as the reference in cl 2.3 to an obligation of VIP Sale to fund "Payout Loans from the 9th Avenue Partnership", as to which the plaintiffs say that no explanation has been provided). It is not necessary here to delve into the queries raised by the plaintiffs as to this, other than to note that the plaintiffs point to the reference in the unsigned 2018 balance sheet of the Everspring Develop Group Unit Trust to a secured loan of $7,571,354.99 from Ninth Avenue Partnership Pty Ltd (Ninth Avenue) as at 2018; the plaintiffs noting that the directors of that company are Mr Elias and Mr Zhang.
11. Complaint is made by the plaintiffs that, instead of contributing through the unitholder entities (as the plaintiffs say was agreed) and otherwise raising bank finance, it appears that entities associated with the then directors of Giant (Mr Zhang and Mr Elias), and with the director and acting director of VIP Sale (Mr Zhang and Ms Cai, respectively), lent moneys to Giant on the security of the trust property, without disclosure to the plaintiffs. In their submissions on the present application, the plaintiffs point to connections between various of the present defendants and companies associated with Ninth Avenue.
12. I return in due course to the significance of the 2018 Unitholders Deed, which the plaintiffs complain was entered into in breach of fiduciary duties owed by various of the defendants.

Burwood 168 Unit Trust

1. The Burwood 168 Unit Trust was established by Trust Deed dated 25 September 2015 (between VIP Sale, as trustee, and Haixin, Mayland, Ozjian and Aqua Blu, as the unitholders). Again, the plaintiffs dispute the date of this document (which Ms Wang says does not bear her signature, was written without her authority, and was not provided to her until 2020).
2. The unitholders in the Burwood 168 Unit Trust are: Haixin, as to 37.5% (3,750 units), Mayland as to 18.75% (1,875 units), Ozjian as to 18.75% (1,875 units) and Aqua Blu as to 25% (2,500 units); and each holds shares in VIP Sale in the same proportions.
3. By reason of the units held by VIP Sale in the Everspring Develop Group Unit Trust, the plaintiffs say (and this does not appear to be disputed) that the relevant stake effectively held by the respective entities in the overall Burwood Development is: for Haixin, 15% (i.e., it holds 37.5% of the entity that holds 40% of the units in the Everspring Develop Group Unit Trust); for Mayland (Ms Cai's company), 7.5%; for Ozjian (Ms Fang's company), 7.5%; and for Aqua Blu (Mr Zhang's company), 10%. However, the plaintiffs further note that both Ms Cai and Mr Zhang have an interest in Clarence Property Group.

The Burwood development

1. I have referred above to the two properties the subject of the Burwood Development.
2. On 29 September 2015, Giant entered into a contract to purchase the Burwood Road Site for the sum of $16.8 million plus GST. The contract provided for a deposit of 10%, payable in two tranches - half on exchange and the balance on 17 December 2015. The terms of the contract granted to Giant an election to extend the completion date to 24 March 2016 upon payment of the second half of the deposit (and Giant in due course exercised that right to an extension). Completion of the purchase ultimately occurred on or before 7 April 2016, when the Transfer was registered. (Complaint is made by the plaintiffs on the present application as to non-disclosure of how and by whom the deposit was paid on behalf of Giant; and as to the incomplete statement of Giant's receipts and payments.)
3. On 16 March 2016, Giant entered into a contract to purchase the Burleigh Street Site for $7.2 million plus GST, with a 10% deposit payable in two equal instalments on exchange or on the earlier of either the defined completion date (being 18 months after the contract date) or actual completion. On 4 October 2017, a Transfer of the Burleigh Street Site to Giant was registered.
4. On 21 December 2017, Giant entered into a building contract with Urban Apartments Pty Ltd (Urban Apartments), a company associated with Mr Elias for the construction of the Burwood Development. As I understand it, there is no dispute as to the entry by Giant into the construction contract with Urban Apartments per se (it apparently having been understood by Ms Wang that Mr Elias' company would carry out the building work) but the plaintiffs have expressed concern that (without obtaining the "agreed" contributions from investors or obtaining construction finance) Giant entered into a building contract providing for 18% p.a. interest to accrue on overdue payments.
5. Various development approvals were issued in relation to the Burwood Development during the course of 2017 through to 2021. Complaint was apparently made by Ms Wang as to the delay in completion (her evidence is that it was represented to her that the development would be completed in about four years). This seems to have led to some of the requests (or demands) for information made by or on behalf of Ms Wang (and the request, to which the Zhang defendants acceded, for Ms Wang to be appointed to the Board of VIP Sale). The plaintiffs complain about the adequacy of the response to these demands for information and, in particular, as to the information supplied in respect of a number of transactions listed in a document provided to them by letter dated 20 April 2021 (including as to the reference to transfers of moneys in "error" between accounts). Suffice it to note (as adverted to above) that the Burwood Development is not yet completed and, as I understand it, there is little likelihood that the plaintiffs will recoup their investment in the project (let alone make any profit from it).

The principal instruments

1. The plaintiffs say that they entered into the project on the faith of representations that, in respect of the Burwood Road Site, the first to sixth defendants were making agreed contributions to a required sum of $9.36 million for a combined 40% equity share in the project (of which the plaintiffs' share was 37.5%, or 15% of the total project), against a required contribution of $3.51 million from Haixin.
2. The principal instruments that the plaintiffs have identified as establishing the venture (apart from the Trust Deeds in respect of the two trusts) are as follows.
3. First, an undated three-page document written mostly in the Chinese language (referred to in submissions as the Chinese language agreement) between Haixin and the fourth to sixth defendants (which the plaintiffs believe is likely to have been signed on or shortly before 8 October 2015). The plaintiffs say that, pursuant to the Chinese language agreement, the fourth to sixth defendants (i.e., the corporate defendants), under the control of the first to third defendants (i.e., the individuals who controlled those corporate defendants), contracted with Haixin to contribute specific sums (agreed to be proportions of respectively 18.75%, 18.75% and 25%) by 24 March 2016; these amounts (in addition to Haixin's 37.5% share) to comprise the $9.36 total million for the 40% stake. The plaintiffs' complaint is that the first to sixth defendants did not honour this bargain and that the corporate (fourth to sixth) defendants thus leveraged their participation in the venture off the plaintiffs' contribution. (The plaintiffs say that the Burleigh Street Site was acquired and its financing proceeded on much the same basis, save that the agreement to contribute was not in writing.)
4. Second, a Deed dated 28 September 2015 entitled "Unitholders & Management Agreement 'Everspring Develop Group Unit Trust'" (the Management Agreement) to which Giant is a party as "the Trustee Company" and to which VIP Sale is also a party, together with Hai Tao and Diamond Bay (which the plaintiffs say was probably prepared and signed on or shortly before 16 October 2015).
5. Another document to which I was taken by the plaintiffs in the course submissions is a second Chinese language document (this one undated) between Giant, "VIP Pty Ltd", Hai Tao and Diamond Bay (referred to in submissions as the Hai Tao agreement).
6. As adverted to above, complaint is made by the plaintiffs as to uncertainty about the precise order of entry into various of the documents relating to the Burwood Development (a number of which the plaintiffs say have been backdated or, in the case of a so-called 30 September minute, fictitious). The plaintiffs say that the precise order of entry into the documents is potentially capable of affecting either the rights of the parties or the probabilities as to material facts concerning the administration of the two trusts (a matter relied upon in support of the present application for disclosure).
7. By way of example, the plaintiffs say that, if the 30 September meeting the subject of the 30 September minute was a real historical event (and the plaintiffs contend that it was not), then this should have been disclosed to them prior to entry into the Chinese language agreement (and hence there would be a claim that it was misrepresented to them how much they were required to contribute by 24 March 2016, even if the first to sixth defendants intended to contribute $7.941 million); but that, if the 30 September minute was produced later, then a different case is available. Similarly, the plaintiffs attach significance to when precisely the Hai Tao agreement was entered into, since that informs the allegations of non-disclosure as to the intentions of the defendants in respect of the National Australia Bank (NAB) borrowing and how contributions to the project were to be made (see below).
8. It is submitted that it is intolerable for a beneficiary to be put in a position where there is uncertainty as to the chronology of events in relation to entry into these documents; and that the plaintiffs are entitled to have a disclosure of documents and information that renders this chronology into a certain state.
9. The plaintiffs have addressed at some length in their submissions inconsistencies with various of the documents, giving rise to their surmise as to when various documents were actually entered into (and it is suggested that the chronology of events pleaded in the respective defendants' defences does not make sense and is internally inconsistent as between various of the groups of defendants). I do not propose here to go into the detail of those submissions. As I understand it, reliance is placed both on the perceived inconsistencies in the documents, and the uncertainty as to the precise order of events to support the submission for the plaintiffs that there is cause for concern as to what has occurred in relation to the respective trusts (and, hence, the plaintiffs say the orders sought for production of documents and disclosure of information should be made).
10. In particular, as I understand it, the somewhat lengthy excursus in submissions into the factual background to the dispute (apart from educating me as to the background or context of the dispute) was largely to establish the basis for, or likelihood of, a general administration order being made in relation to the trust or trusts (in lieu of which discovery orders as here sought may be made), having regard to the observations of Young J, as his Honour then was, in McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623; (1985) 9 ACLR 926 (McLean v Burns Philp). I address that authority in due course. I also note that there is a separate action on foot for the making of a general administration order in relation to the respective trusts, which has been listed for hearing in September this year.
11. However, the very exercise of going in detail through the history of the dealings between the parties in relation to the Burwood Development and their investments therein causes me no little concern, because it seems to me to come perilously close to inviting a determination as to contested factual issues in advance of a final hearing (and, pertinently, in advance of any evidence having been filed other than that relied upon for the present interlocutory application). It does not appear to me to be appropriate to embark upon such an exercise in the course of an interlocutory application such as the present; in advance of the application for general administration orders itself.

Zhang defendants' pleaded account of plaintiffs' participation in project

1. It is convenient at this stage (since it highlights some of the factual issues in dispute) to point to the allegations made in the defence of the Zhang defendants as to the circumstances in which the plaintiffs came to invest in the Burwood Development project (see at [12B]-[12R]).
2. Relevantly, it is there pleaded that: (a) Ms Cai was first introduced to Ms Wang in about 2012 by Ms Fang and has since then provided various real estate services to Ms Wang in relation to properties owned by Ms Wang; (b) in about January 2014, Ms Cai asked Ms Fang whether Ms Fang would be interested in investing in a property development at Wolli Creek (a development being undertaken by Mr Elias' group); and that Ms Fang indicated that she was interested in participating in the project and that Ms Wang was also interested in participating; (c) by September 2015, both Ms Fang and Ms Wang through their respective corporate entities had jointly invested with Ms Cai and Mr Zhang in a number of property development projects, including developments at Wolli Creek and Penrith (both of which are developments undertaken by Mr Elias' group) and at Petersham; (d) in all of these projects, Ms Cai and Mr Zhang had very little direct communication with Ms Wang and any information provided to, or received from, Ms Wang was through Ms Fang; (d) in about mid-September 2015, Ms Cai and Mr Zhang, Mr Rong and Mr Elias decided that they would they would invest in a property development project of the Burwood Road Site, and possibly adjoining land, to be developed by Mr Elias' group; (e) Ms Cai mentioned the Burwood project to Ms Fang but did not invite Ms Fang to participate as an investor; a short time later, Ms Fang advised Ms Cai that both she and Ms Wang wished to participate as investors in the project and asked whether that would be possible; and (f) Ms Wang and Ms Fang were both permitted to join, and did join, as investors in the Burwood Development.

Procedural history

1. That brings me to the history of the matter leading up to the present application.
2. The plaintiffs commenced the proceeding by statement of claim on 11 August 2020. The various active defendants filed their defences by 22 October 2020.
3. On 1 February 2021, the plaintiffs indicated an intention to amend their statement of claim and an order was made by consent that the plaintiffs serve a proposed amended statement of claim by 12 February 2021. The plaintiffs apparently did not do so.
4. On 22 February 2021, when the matter was back before the Court the plaintiffs informed the Court that they had commenced preparing a proposed amended statement of claim and sought an extension to 10 March 2021 to serve the proposed amended pleading. That extension was granted and an order was made that the plaintiffs serve their proposed amended statement of claim by 10 March 2021 and their evidence in chief by 29 March 2021. Again, it appears that the plaintiffs did not do so. Instead, on 13 April 2021, the plaintiffs filed the notice of motion now before me for determination, seeking extensive disclosure from the first to eighth defendants and what, in effect, are interrogatories.
5. Both the Zhang and Fang defendants point to the plaintiffs' stated intention to amend the statement of claim. They argue that the purpose of the present application is not to advance the resolution of the issues in dispute in the proceeding; rather, that it is to facilitate the plaintiffs' proposed amendment to their statement of claim so as to make new unspecified allegations (in circumstances where the plaintiffs have already been capable of pleading the existing claims). As adverted to above, the plaintiffs characterise the information sought as being necessary to enable them properly to amend their pleading (the initial pleading apparently having been prepared before a change in legal representation) rather than to enable them to trawl for additional claims to make. In any event, complaint is made by both the Zhang and Fang defendants that the present application is premature, as it is brought prior to the service of any evidence in the proceeding. Senior Counsel for the Zhang defendants was at pains to point out that in due course the plaintiffs should be able to obtain documents (at least insofar as they are relevant to the issues in the proceeding) through the usual disclosure process.

Compulsory sale of VIP Sale's units in the Everspring Develop Group Unit Trust

1. After the plaintiffs filed their statement of claim in this proceeding (in which an order was sought that VIP Sale be wound up - see prayer 10 of the statement of claim), Giant exercised (or purported to exercise), the compulsory sale procedure under cl 8 of the 2018 Unitholders Deed in respect of VIP Sale's units in the Everspring Develop Group Unit Trust (in reliance on cl 8.2.3 of the 2018 Unitholders Deed). (It is thus perhaps ironic to note that, if the 2018 Unitholders Deed is valid, then the complaint by the plaintiffs that there has been an attempt to eject them from the project altogether stems from events triggered by their own conduct - i.e., their claim for a winding up order as a remedy for alleged oppressive conduct. The plaintiffs, however, submit that reliance on the compulsory sale process under the 2018 Unitholders Deed constitutes an impermissible attempt to oust the jurisdiction of the Court.)
2. In any event, the plaintiffs have asserted that Giant had no entitlement to invoke the compulsory sale procedure under cl 8 (on grounds which include that the 2018 Unitholders Deed is liable to be set aside) and have made clear their intention to challenge in this proceeding the validity and effectiveness of the unit sale that in due course followed Giant's invocation of the compulsory sale procedure (although the Zhang defendants point out that the plaintiffs have refrained from seeking interlocutory injunctive relief to restrain the sale process).
3. I was taken in the course of the present application to the correspondence in which Giant invoked the compulsory sale process; from which it is apparent that Haixin was notified that Giant was invoking that process (see letter dated 30 November 2020 from Giant to each of VIP Sale, Clarence Property Group, PJE918 and Diamond Bay), a copy of which letter was sent to Haixin as a shareholder of VIP Sale. It would seem that Haixin chose not to avail itself of, or to seek, an opportunity to acquire a proportionate share of VIP Sale's units in the course of that process. I was also taken to correspondence in which the solicitors for the Fang defendants took objection to the compulsory sale process (which highlights that the position of the Zhang and Fang defendants is not necessarily aligned on all issues in the proceeding).
4. On 21 July 2021, VIP Sale entered into a sale agreement to sell VIP Sale's units in the Everspring Develop Group Unit Trust to PJE918. The Zhang defendants say that this occurred in circumstances where Giant, Diamond Bay and PJE918 insisted that VIP Sale was obliged to complete the sale process and reserved their rights in the event that VIP Sale failed to do so.
5. It is said by the Zhang defendants that, to preserve the status quo against the possibility that the plaintiffs are successful in their contentions (those being that the 2018 Unitholders Deed is liable to be set aside or was entered into in breach of fiduciary duty, or that the compulsory sale process is otherwise invalid, unlawful or in breach of any duty), VIP Sale, Giant and PJE918 have entered into a further deed which obliges the parties to reverse the sale of VIP Sale's units to PJE918 if any such contention is made good. The Zhang defendants say that, by entering into these arrangements, VIP Sale has protected itself (and its unitholders) against an exposure to damages by Giant and PJE918 in failing to comply with the compulsory sale process but, at the same time, preserved VIP Sale's interest in the Everspring Develop Group Unit Trust in the event that the plaintiffs are successful in the relief they seek.

Issues in dispute in the substantive proceeding

1. Before turning to the precise relief sought on the present application and the parties' submissions in relation thereto, it is convenient at this point to note the claims raised on the pleadings as they presently stand (though, as I have already adverted to, the plaintiffs have made no secret of their intention to amend their pleadings to include other claims; and they have intimated that this may include the joinder of other parties).
2. Broadly speaking, the claims made in the statement of claim as it presently stands are for misleading or deceptive conduct and for breach of fiduciary duties or oppressive conduct.
3. As to the misleading or deceptive conduct claims, they relate in the main to alleged oral representations (albeit with some representations allegedly arising out of the documents) and alleged non-disclosures.
4. The pleaded claims of misleading or deceptive conduct may be summarised as follows. First, the making of alleged oral representations by Ms Cai on or about 2 October 2015 about the purchase price of the land for the Burwood Road Site, the timeframe for completion of the project (four years) and the estimated return on investment (see statement of claim at [47]). Second, alleged written representations by all the defendants made in about October 2015 in the terms of the Chinese language agreement, representations which were allegedly repeated by Ms Fang on 14 March 2016 (statement of claim at [13], [48], [50]). Third, alleged oral representations by Ms Cai in or about October 2015 about how the project would be financed and operated (statement of claim at [49]). Fourth, alleged oral representations by Ms Cai in or about late March 2016 about the purchase of the Burleigh Street Site (statement of claim at [51]). Finally, alleged non-disclosures by all defendants of matters which it is alleged were required to be disclosed to the plaintiffs, including that: the land was acquired by Giant in part using the proceeds of an $8.4 million loan from the NAB secured by a mortgage over the land; the Unit Trust Deed for the Burwood 168 Unit Trust was backdated to 25 September 2015; and that the investment required by VIP Sale for the Burwood Road Site was $7,941,150, not $9,360,000 (statement of claim at [52], [56]).
5. It is alleged that each of the pleaded representations was a representation with respect to a future matter (the plaintiffs here invoking the deeming effect of s 4 of the Australian Consumer Law) (statement of claim at [54]-[55]). However, the plaintiffs also make positive allegations as to a series of matters which allegedly rendered the defendants' conduct misleading or deceptive, including that: the contribution that VIP Sale was liable to make for the Burwood Road Site and associated costs was not $9,360,000 but, instead, $7,941,150; the Burwood Road Site was encumbered by a mortgage; Mr Zhang was the sole director of VIP Sale; and Ms Cai, Ms Fang and Mr Zhang used bank financing to fund their contribution to the investment (statement of claim at [56], [59]-[60]).
6. Thus the misleading or deceptive conduct claims broadly relate to the investment by the plaintiffs into the project.
7. As to the claims of breach of fiduciary duties, these relate to the entry by VIP Sale into the 2018 Unitholders Deed in September 2018. The plaintiffs allege that: (a) VIP Sale breached the fiduciary duties it owed to unitholders in the Burwood 168 Unit Trust by entering into the Deed in circumstances of an alleged actual or potential conflict between the interests of unitholders in the Burwood 168 Unit Trust and third parties (namely, Giant, Mr Elias and companies associated with Mr Elias) (statement of claim at [64]); and (b) Mr Zhang (in his capacity as sole director of VIP Sale at the time) and Giant knowingly induced or procured the alleged breaches by VIP Sale of its fiduciary duties (statement of claim at [65], [66]).
8. It is further alleged that Mr Zhang, by causing VIP Sale to enter into the 2018 Unitholders Deed, has conducted the affairs of VIP Sale in a manner that is oppressive to the plaintiffs within the meaning of s 232 of the Corporations Act (statement of claim at [68]).
9. The relief claimed in the proceeding includes damages for loss suffered by the defendants' alleged misleading or deceptive conduct in the amount of $5,738,905 (that being the total amount invested by the plaintiffs in the project). In the alternative, the plaintiffs seek a range of remedies in relation to the 2018 Unitholders Deed, including that: VIP Sale, Mr Zhang and Giant account to the plaintiffs for any benefit obtained by the Everspring Develop Group Unit Trust from entry into the Trust Deed; orders pursuant to the statutory oppression remedy in s 233 of the Corporations Act (including a compulsory buy-out order requiring the other investors in VIP Sale to acquire the plaintiffs' shareholding in VIP Sale at fair value, a compensation order, an order that VIP Sale be wound up and an order varying the 2018 Unitholders Deed); and an order appointing a receiver and manager to the assets of the Burwood 168 Unit Trust.
10. Pausing here, this indicates the difficulty of proceeding at this stage on at least one of the bases (i.e., the oppression remedy) on which the orders are sought on the present application. The Zhang defendants say (and I agree) that there should not be a determination on an interlocutory basis that the affairs of VIP Sale have been conducted in an oppressive manner within the meaning of s 232 of the Corporations Act, or that individuals were acting as de facto and/or acting directors of various companies. (At most, it would be open to determine whether there was a serious question to be tried as to those matters, or a reasonable basis for concern as to the alleged conduct, were that to be relevant for the purposes of a particular application in the proceeding.) For the same reason, it is said that the factual disputes raised on the pleadings as to conversations in which the Zhang defendants claim to have disclosed to Ms Wang many of the matters about which she now complains cannot properly be determined at this stage.
11. So, for example, the Zhang defendants point to the factual dispute as to Ms Wang's knowledge (or otherwise) of the existence of the NAB loan, which the Zhang defendants have pleaded was disclosed to Ms Wang (alleging that Ms Wang was offered the opportunity to take the benefit of the loan to fund in part her contributions, which she declined). Similarly, it is said that there is a factual dispute as to whether, in August 2018, Ms Cai and Mr Zhang informed Ms Fang (and consequently asked her to inform Ms Wang) of Hai Tao's inability to continue in the project, the proposal for Clarence Property Group and PJE918 to acquire Hai Tao's units in the Everspring Develop Group Unit Trust and the proposed amendment to the cost sharing arrangements which were ultimately reflected in the 2018 Unitholders Deed.
12. Complaint is made by the Zhang defendants that on the present application the plaintiffs are seeking to invoke, on an interlocutory basis, the discretionary jurisdiction to intervene in the administration of trusts by recourse to facts which can only be established on a final hearing. Further, the Zhang defendants complain that the plaintiffs here invoke that jurisdiction by pointing to what they contend are questions arising from facts in issue which call for answers, in circumstances where the defendants have not yet served (or been required to serve) any evidence in the proceeding.
13. The plaintiffs, conversely, maintain that there is a circularity of argument to suggest that an administration suit must first be determined before determining an application for discovery of the kind here made and that the appropriate test is as to whether there is a cause for concern demonstrated as to misconduct in the administration of the trust(s) in order to enliven the jurisdiction here invoked.
14. That brings me to the relief sought on the present application.

The present application

1. The notice of motion dated 13 April 2021 contains 18 prayers for relief. The Zhang defendants have categorised those broadly into the following eight categories and it is convenient to deal with them as such.
2. First, prayers 1-3 seeking orders requiring the provision of the following to the plaintiffs' solicitor or to the Court: by Giant (the trustee of the Everspring Develop Group Unit Trust) all books and records of the Everspring Develop Group Unit Trust; by VIP Sale (the trustee of the Burwood 168 Unit Trust) all books and records of the Burwood 168 Unit Trust; and by Mr Zhang (a director of VIP Sale and a former director of Giant) all books and records of both the Everspring Develop Group Unit Trust and Burwood 168 Unit Trust in his possession. I refer to these as the Trust Books and Records Orders.
3. Second, the order sought in prayer 4 requiring Mr Zhang and VIP Sale, pursuant to ss 247A or 233 of the Corporations Act, to provide all books and records of VIP Sale to the plaintiffs' solicitor or the Court. I refer to this as the Corporations Act Order.
4. Third, prayers 5 and 6 seeking orders requiring Ms Cai and Ms Fang, respectively, to provide to the plaintiffs' solicitor or the Court all books and records of Giant and VIP Sale (whether or not held by those entities as trustees of the Everspring Develop Group Unit Trust and Burwood 168 Unit Trust, respectively) in their possession. I refer to these as the Directors/Officers Orders.
5. Fourth, prayers 9 and 10 seeking orders requiring VIP Sale, pursuant to r 46.2 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) or the Court's inherent power, to file and serve upon the plaintiffs a detailed list of the assets and liabilities of the Burwood 168 Unit Trust and a detailed list of the transactions of the Burwood 168 Unit Trust specifying all money received and disbursed, such lists to be verified by Mr Zhang and with each of Ms Cai, Ms Fang and Mr Zhang required to disclose to VIP Sale all documents and information in their possession to enable it to comply with the order.
6. Fifth, prayers 11 and 12, seeking equivalent orders to orders 9 and 10 but obliging Giant to file and serve upon the plaintiffs a detailed list of the assets and liabilities of the Everspring Develop Group Unit Trust and a detailed list of the transactions of the Everspring Develop Group Unit Trust, specifying all money received and disbursed, with each of Ms Cai, Ms Fang and Mr Zhang required to disclose to Giant all documents and information in their possession to enable it to comply with the order.
7. I refer to the above two categories of orders as the Transaction List Orders.
8. Sixth, prayer 13, seeking an order requiring the defendants to give discovery, or preliminary discovery under Pt 5 of the UCPR, of the 41 categories of document set out in the Schedule to the letter dated 7 April 2021 from the plaintiffs' solicitors to the Zhang defendants' solicitors. I refer to this as the Discovery Orders.
9. Seventh, prayer 14, seeking an order requiring Ms Cai and Mr Zhang, and their companies Mayland and Aqua Blu, to provide a written response to the 28 interrogatories (which the Zhang defendants note in many cases contain up to 7 sub-questions) in the letter dated 7 April 2021 from the plaintiffs' solicitors to the Zhang defendants' solicitors, as well as to the four further questions set out in prayer 14.
10. Finally, prayer 15, seeking an order requiring Ms Fang and Ozjian to provide a written response to the 9 interrogatories in a separate 7 April 2021 letter from the plaintiffs' solicitors to the Fang defendants' solicitors.
11. I refer to the last two categories of orders as the Interrogatories Orders.

Disclosure by Trustees and Directors/Officers

1. As to the production by Giant (as trustee) of all books and records of the Everspring Develop Group Unit Trust (of which Haixin is not a unitholder or creditor), and leaving aside for the moment that Giant does not here oppose (or consent to) such an order, the plaintiffs say that the right of Haixin to seek production of records from Giant (other than by way of discovery or preliminary discovery under the procedures provided in the UCPR) arises as follows.
2. First, it is said that Haixin, as a creditor and beneficiary of the Burwood 168 Unit Trust (the trustee of which, VIP Sale, is a creditor and/or beneficiary of Everspring Develop Group Unit Trust), has standing (at least given the failure of VIP Sale to do so) to seek: (a) administration relief in respect of the Everspring Develop Group Unit Trust and, as an incident thereof, to claim production from Giant to VIP Sale and to Haixin of trust documents and information in respect of the Everspring Develop Group Unit Trust; (b) corporate and trust records of Giant to which VIP Sale is entitled, pursuant to the terms of the Everspring Develop Group Unit Trust Deed and the Management Agreement (including accounts, pre-emption notices and the like) and that it is entitled to have or obtain (by virtue of its right under the Management Agreement) representation on the board of Giant, but extending in any event to all of the trust records of the Everspring Develop Group Unit Trust that Giant has under its control by its officers, servants or agents.
3. Second, that Haixin, as a creditor and beneficiary of the Burwood 168 Unit Trust, which is a member of Giant, has standing (at least given the failure of VIP Sale to do so) to seek the corporate records of Giant, to which VIP Sale is entitled pursuant to the ordinary rights of a shareholder, such as minutes of meetings and resolutions of the Company, notices, financial statements published to members in Giant and reports that the directors are obliged to make to the company, including in respect of any business put to the members for their decision, or arising because of conflicts of interest or duty, to the extent not already covered above.
4. Third, that Haixin is entitled to seek disclosure from Giant because Giant owes direct equitable obligations of confidence and, alternatively, ought to have made disclosure because it owes direct fiduciary obligation and had conflicts which required disclosure.
5. There is no dispute that, in the present case, the relevant Trust Deeds give to any beneficiary the right to access to all of the records of the trust. The plaintiffs point in this regard to the clauses in the Trust Deeds which oblige the trustee to keep proper accounts, financial statements and the like (see cll 64, 65, 67 and 68) and to the obligation under the Management Agreement (cl 13.1), as well as to the obligation under s 286 of the Corporations Act. Relevantly, the right of access and inspection of books and records under the respective Trust Deeds is dealt with by cl 69, which provides that: 69. If any unit holder gives reasonable notice to the trustee, then that unit holder is entitled to inspect all of the books and accounts of the trust.
6. Clause 13.1 of the Management Agreement provides that: 13.1. The Company shall keep proper and regular books of account of the Business which shall give a true and fair view of the cost and income of the Business and such books of account shall be kept properly posted by the Company and shall be available for inspection and audit at all reasonable times by any Shareholder hereto or by any duly authorised agent of a Shareholder.
7. The definition of "Shareholder" in the Management Agreement (see cl 29.1) includes VIP Sale. Therefore, it is said that VIP Sale would be entitled under the Management Agreement to call for inspection of the books of account of the "Business" of the Everspring Develop Group Unit Trust (these being records that the trustee, Giant, is obliged to keep).
8. The plaintiffs say that compliance with the record keeping obligations imposed by s 286 of the Corporations Act, under cll 68 of each Trust Deed and under cl 13.1 of the Management Agreement, is necessary in order for the access and audit rights of unitholders under each of cll 67 and 69 of each Trust Deed and cl 13.1 of the Management Agreement to be effectively exercised.
9. The plaintiffs also point also to what is said (at [17-13]-[17-15]) in Jacobs' Law of Trusts, eighth edition, LexisNexis Butterworths, 2016 as to the obligations of trustees both to keep and to render (and to be ready to render) proper accounts, and to report to beneficiaries or to the Court concerning the administration of the trust; that trustees should gain no advantage by a failure to keep and produce proper records; that the Court will resolve doubts against trustees guilty of this failure; and that adverse inferences may be drawn against trustees who destroy records or who fail to create appropriate vouchers. It is noted that trustees must pay the costs of proceedings instituted to obtain accounts that they fail to render. The plaintiffs note that the authors there observe that, in addition to keeping and rendering accounts, trustees must, when asked, give full information to the beneficiaries as to the amount of the trust property and as to its investments.
10. Pausing here, the consequences of a failure (if the trustees were here to be guilty of such a failure) to comply with the obligation to keep proper books and records, and the ability to draw adverse inferences from such a failure, are not in my opinion necessarily to the point where what is sought are the books and records (however incomplete or inadequate they might be). I am not in a position to determine whether there has been such a failure and I should not proceed on the assumption that there has been. Rather, the point seems to me that it might reasonably be expected that the trustee (here, relevantly, Giant) would have been careful to comply with its record keeping obligations both at statute and as a matter of general law having regard to its obligations as trustee, which a beneficiary (here, VIP Sale) may be entitled to inspect.
11. That said, insofar as such documents have already been produced (see below), then there would be no utility in making an order for their production again (and, to the extent that what is sought goes beyond the trust documents themselves - such as the metadata showing the creation or amendment of particular documents), it is difficult to see how there would be an entitlement thereto based on the beneficiary's right to inspect books and records of the trust.
12. The plaintiffs emphasise that the right to access to documents and information is an incident of the Court's supervision of the administration of trusts and estates, which in turn is an incident of the trustee's obligation to adhere to the terms of the trust. It is said that even a potential object of discretion has a right to have the trust administered transparently and with accountability (citing Wright v Stevens [2018] NSWSC 548 (Wright v Stevens) at [252]-[289], [297]-[298], [335]; Jordan v Goldspring [2021] NSWSC 7; and the article by The Hon JC Campbell (then a Judge of Appeal), writing extra-judicially in Access by Trust Beneficiaries to Trustees' Documents Information and Reasons, (2009) 3 Journal of Equity 97) (the Campbell Article); and that the right is incidental so that the beneficiary can see what has been done and to decide what, if any, administration relief to seek.
13. Indeed, the plaintiffs say that Haixin's position is stronger than that of a discretionary object; in that Haixin is an actual beneficiary with express rights of access to all the records of the Burwood 168 Unit Trust (which in turn is an actual beneficiary with express rights of access to all the records of the Everspring Develop Group Unit Trust).
14. The plaintiffs note that this relief can be sought without a decree of general administration, by virtue of r 54.3 of the UCPR or the Court's inherent supervisory power (citing Stamoulos v Constantinidis; Constantinidis v Constantinidis [2017] NSWSC 1808, at [50]-[52]; Rattigan v Hanly [2020] NSWSC 1722 at [45]-[55]; Wright v Stevens at [319]-[332]).
15. Reference is made to Hancock v Rinehart (Trust documents) [2018] NSWSC 1684, (the Rinehart Trust Documents decision) as to the range of what may be classified as trust records (there, the expression used was "documents of the trust") (see at [107]ff]), his Honour there including within the scope of that category: all electronically-held accounting records of the trust where they existed; access to any electronic database or other electronic information retention system maintained by or for the trust; all documents to which the trustee gave consideration or "used" in performance of her duty as trustee of the trust including advice obtained in connection with the defence of proceedings; any documents to which a trustee gave consideration in performing the trustee's duty trustee to investigate and take steps to ensure that a company, which was an asset of the trust, paid appropriate dividends to the trust; vouchers concerning expenses relating to a particular property for repairs and improvements made at the expense of the trust; vouchers containing expenses disbursed for the trustee's benefit; documents relating to the sale of a property belonging to the trust; any document relating to a loan with respect to that property; any communication or advice sought with respect to that property; records of "reversal" transactions (which the plaintiffs say is a category germane to the present case given the recording of payments made in "error"); all primary accounting records relating to any expense in respect of which the trust was charged; all retainers in respect of any legal advisor and charged to the trust account; all records concerning the process by which the accounting for the trust was performed; all files maintained by the trustee in respect of each of the beneficiaries of the trust; all documents relating to any advance of moneys made by the trustee to the trust; minutes of meetings of a corporate asset of the trust; costs of legal and accounting advice; and trust documents in the custody of third parties. (It is also noted that an affidavit verifying compliance was required and vouching for each transaction in the account ordered.) I return in due course to consider the implications of this decision on the application here made.
16. As to the production of documents and information from Giant, the plaintiffs say that here (unlike the situation in Re Butt (deceased); Butt v Kelson [1952] 1 All ER 197 (Butt v Kelson), to which the Zhang defendants have referred - see below), Giant is itself a trustee and has promoted and operated an investment venture in which the plaintiffs are not volunteers but have invested millions of dollars.
17. The plaintiffs say that, where there is a proper case for consideration of administration relief (referring to McLean v Burns Philp at 635A-B), supervisory control would be exercised to compel the trustee to exercise its powers to produce disclosure from the ultimate investment vehicle company. The plaintiffs assert that, in the present case, there are multiple instances of self-interested dealing by those in control of the venture, serious irregularities in the accounts, and many proper questions about "strange dealings" with large sums of money, which appear not to have been properly administered. (Pausing here, whether those allegations are made good will only be able to be determined on a final hearing - for present purposes, what is relevant is that these are allegations based on a necessarily incomplete view of the evidence.)
18. The plaintiffs note that in McLean v Burns Philp (at 627C-E, 636F-638A), his Honour held that a unitholder in a trust that was in turn a creditor or a beneficiary of a head trust had standing to seek administration relief in respect of the head trust, and that his Honour further noted (at 635E, 643D) that this carried the right to seek access to trust documents and information. The plaintiffs say that to seek this remedy it is not necessary first to obtain a general administration order because a general administration order will not be made except to the extent necessary (i.e., unless there is no more specific order that will meet the case). (Pausing here, there does, however, seem to me to be a distinction between the making of an order for discovery in lieu of a general administration order after the hearing of a contested application, interlocutory or otherwise, for a general administration order and the present case, where the application for a general administration order has not yet been heard and where the evidence as to the question of irregularities or misconduct has not yet been tested even at an interlocutory level.)
19. The plaintiffs nevertheless submit that the right of a beneficiary or creditor to seek general administration of a trust confers standing to seek remedies which could be obtained in such a suit, including remedies that could be enforced on behalf of the administered trusts against another trust of which it is a creditor or beneficiary.
20. An alternative approach to standing that is here relied upon by the plaintiffs is that stated in Ramage v Waclaw (1988) 12 NSWLR 84 (Ramage v Waclaw), namely that a beneficiary may, in special circumstances, sue in its own name for purely equitable relief joining the trustee and other beneficiaries as defendants (at 91E).
21. The plaintiffs point out that in Ramage v Waclaw (at 91F), Powell J noted that circumstances that may be regarded as special include collusion between trustee and debtor; and insolvency of the trustee, but extend also (see at 91G) to other cases, including improvident breach of duty; and (at 92A-B) to "all cases where the relation between the executors and the surviving partners is such as to present a substantial impediment to the prosecution by the executors of the rights of the parties interested in the estate against the surviving partners" (this last example being one that the plaintiffs submit is apt to meet the present case).
22. The plaintiffs submit that (if left to Mr Zhang) VIP Sale will never compel the production of records and information to which it is entitled from Giant, given that: VIP Sale has, through its solicitors, been requested to sign short minutes consenting to the relief sought against it in the notice of motion (comprising the provision of accounts, the giving of access to trust records, production of corporate records and discovery) and has refused that consent; over a long period VIP Sale has not supplied the material requested and requests for information have produced only selective responses (complaint is made that the list of transactions supplied on 22 April 2021 is incomplete and does not explain the purpose of the transactions); many self-interested dealings by Mr Zhang and others with Giant or with VIP Sale have gone undisclosed to the plaintiffs over a period of years; and that neither VIP Sale nor Mr Zhang has filed any affidavit deposing to what records VIP Sale has or what is held by Mr Zhang for VIP Sale. It is submitted that there can be no confidence that Mr Zhang will voluntarily make available records and information that he obtained while holding office or acting as director or agent of Giant. Further, it is said that Mr Zhang is personally interested, including through Clarence Property Group and Ninth Avenue, and not likely to welcome scrutiny of his actions; and that Mr Zhang has resisted disclosure in the past.
23. It is thus said that Haixin has standing to seek the relief (by way of document production and information from Giant) that VIP Sale itself is entitled to seek (and that Haixin is entitled, by virtue of its direct interest in and the terms of the Burwood 168 Unit Trust, to have that information passed on to it). The Zhang defendants cavil with that proposition - and say that even if VIP Sale obtained the documents and information, this would not make that material accessible by Haixin, as it would not be books and records of the trust of which VIP Sale is trustee.
24. The plaintiffs further say that the activities of directors of a trust company must be viewed in light of the way that this shapes their duties to the company (citing Australian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd (2015) 218 ALR 302; [2015] VSCA 9 at [228]-[229]); and that, because of the impact of the company's trusteeship on the directors' roles and obligations, their correspondence and activities are to be viewed in a corresponding light, potentially affecting the range of information and records that they are obliged to disclose to the company or keep as its trust records.
25. The plaintiffs say that VIP Sale, by reason of the terms of the Everspring Develop Group Unit Trust Deed and cl 13.1 of the Management Agreement, has the right of access to all the records of the Everspring Develop Group Unit Trust; and that Haixin, as unitholder in the Burwood 168 Unit Trust has the right to all the records of that Trust, which must include the records that it has and the records that it should obtain pursuant to its rights in the Everspring Develop Group Unit Trust.
26. It is submitted that it is a breach of trust for Giant or VIP Sale to use the advantage of control to deny to, or withhold from, Haixin information to which Haixin is entitled to access under the terms of the Burwood 168 Unit Trust Deed or under the general law of trusts; or to which VIP Sale is entitled under the Everspring Develop Group Unit Trust, Management Agreement or under the general law of trusts. (Again, it seems to me to be problematic to seek to rely here on breaches of trust that have not yet been determined at a final hearing.)
27. In respect of Giant, the plaintiffs say that this is true whether or not Giant owes any direct obligation of confidence or fiduciary obligation to Haixin; and that it would be a breach of trust for Giant to withhold from VIP Sale information with a view to keeping it from one or more of the Burwood 168 Unit Trust beneficiaries. However, the plaintiffs further submit that Giant does owe an obligation of confidence to Haixin as a beneficiary of Burwood 168 Unit Trust, and is in a direct relationship of fiduciary obligation to Haixin in that interest.
28. Reference is made in this regard to the discussion by Professor Finn (as his Honour then was) in Fiduciary Obligations (1977, Lawbook Co) (Fiduciary Obligations), (at [469]-[470]) as to relationships where fiduciary obligations are owed to parties in a chain and in particular to the hypothesis advanced by Professor Finn (there referring to Powell & Thomas v Evan Jones [1905] 1 KB 11 and Blair v Martin [1929] NZLR 225) that "if B is engaged by A to perform some service on his behalf, and then B passes that work on to C, C being given the substantial performance of B's undertaking and knowing that what he is doing is for A's benefit, then the A-C relationship will be a fiduciary one for the purposes of the services C in fact renders".
29. Reference is also made to Australian Securities Commission v AS Nominees Ltd (1995) 62 FCR 504; [1995] FCA 1663 (ASC v AS Nominees), where Finn J (at [60]-[61]) found that a trustee company owed direct fiduciary obligations to its beneficiary company's investor beneficiaries, in circumstances where the two companies had common boards and the ultimate beneficiaries were exclusively (through the first trustee) the investors in the ultimate trust.
30. The plaintiffs point in this regard to the following matters in the present case: that (a) Mr Zhang, as well as being the sole director of VIP Sale, was one of only two directors of Giant (until he resigned from Giant's board in November 2020); (b) there was express agreement in the Management Agreement that Mr Zhang exercised representative functions for VIP Sale on the board of Giant; (c) in the Management Agreement, VIP Sale contracted expressly as trustee for the Burwood 168 Unit Trust; (d) the Management Agreement regulated the conduct of Giant both in the company and shareholders' relationship as well as between it as trustee and the unitholders of the Everspring Develop Group Unit Trust (referring to Recital A and cl 2 by way of example), and Giant undertook these obligations knowing and expressly agreeing that it was contracting with a unitholder which was itself a trustee (knowing, through Mr Zhang, about the Burwood 168 Unit Trust, including the identities of its unitholders); (e) by cl 10 of the Management Agreement, Giant agreed that unanimous consent of Unitholders was required for a large number of matters (by which it is said that Giant's conduct was closely controlled and confined to the Trust business and as to how it could be carried on; and there was thus very close regulation for the benefit and protection of VIP Sale's unitholders, as well as the other unitholders in the Everspring Develop Group Unit Trust); (f) the original incorporation of Giant was made by the fourth, fifth and sixth defendants under the control of the first, second and third defendants (and the plaintiffs in this regard say that it was only at the point of introducing the plaintiffs into the venture, and as part of Giant's fundraising activities, that the Burwood 168 Unit Trust was established as a sub-trust within the venture's structure (it being said that Giant was in a real sense as much a promoter of the Burwood 168 Unit Trust as were the first to sixth defendants); (g) Giant was intended to, and did, obtain the benefit of the funds subscribed by the plaintiffs and was thereby enabled to complete the purchase of the Burwood Road Site and to obtain finance on a footing that it had substantial trust funds raised from its investors; and (h) at that time, Mr Elias was not a director of Giant and the only director was Mr Zhang, the sole director of VIP Sale.
31. The plaintiffs say that various terms of the Management Agreement (such as cll 1, 2.2, 3, 4 and 11.2) make plain that Mr Zhang's directorship of Giant was in a representative capacity (noting that, under cl 11.3, VIP Sale has a right to replace Mr Zhang with another representative director on the Board of Giant if he resigns or is removed). Complaint is made that the resignation of Mr Zhang from the Board of Giant in 2020 (while remaining a director of VIP Sale) and his failure to exercise the rights contained in cl 11.3 of the Management Agreement to appoint a replacement representative director (while continuing to be involved in the project both through his company's interest in VIP Sale, as well as through Clarence Property Group) has had the practical effect (which it is said must be calculated) of frustrating Haixin's rights of access to information and records.
32. The plaintiffs say that, given the difficulty that has been experienced in obtaining the facts concerning when and in what order the various instruments and agreements were prepared and executed (requiring close study of and the drawing of inferences from the contents of the documents), it is important for them to see the originals (especially the electronic originals) and the electronic drafts and other records of the preparation and commissioning of the constitutive instruments, related agreements and other central records of and pertaining to the two trusts. In particular, it is said that retainer agreements and payment records of the professionals involved are likely to be informative; and that these are among the materials that the defendants are unwilling to produce.
33. It is noted that, in ASC v AS Nominees, Finn J considered the position of a trust manager in relation to trust investors and concluded (at [69]-[70]) that in the circumstances of that case, the manager owed direct fiduciary obligation to the beneficiaries and not only to the trustee (that conclusion being made by reference not only to the terms of the trust deeds to which the manager was party but also what the manager "in fact did for the trusts" (see at [71]). The plaintiffs say that Giant played a similar role in the present case, in that it secured the investment by paying for the sites and undertook obligations to the trustee to benefit the investor beneficiaries. The plaintiffs say that Giant must have appreciated that the plaintiffs were vulnerable (being, it is said, completely in Giant's hands) and that its actions were required to be for their benefit, equally with all other investors. It is said that this appreciation is apparent in the subsequent conduct of Giant (and its unitholders and directors) in naming Haixin as a party to the 2018 Unitholders Deed of Agreement (although, as noted above, it is said that the Deed was never actually presented to or executed by Haixin).
34. In this regard, the plaintiffs note that a direct fiduciary obligation between a director and shareholder was recognised in Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWCA 199 in circumstances of relative advantage, information and control on the one hand, and vulnerable powerlessness on the other; and that in In the matter of Idyllic Solutions Pty Ltd; ASIC v Hobbs [2012] NSWSC 1276 (ASIC v Hobbs) (at [1497]-[1508], [2418]-[2431]) a direct fiduciary obligation was found between company officers (involved in the promotion and operation of managed funds) and the investors (reference there being made to Daly v The Sydney Stock Exchange Ltd (1986) 160 CLR 371; [1986] HCA 25); the schemes in ASIC v Hobbs being "such as to inform potential investors of the ability to give them access to investment schemes that would yield a high rate of return" ([1507]). (I interpose to note that the underlying factual dispute in ASIC v Hobbs was very different from that in the present case; and that the finding to which the plaintiffs here point was made after a contested hearing on the factual and legal issues there raised.)
35. The plaintiffs say that, in the present case, Giant was involved in promoting and introducing the plaintiffs into the scheme (which it is said was undoubtedly a managed investment scheme, though not required to be registered); and that Giant continued thereafter to operate the venture and to do so in ways that the plaintiffs say ought to have been disclosed to Haixin (in circumstances where Haixin was vulnerable in the absence of any request to the plaintiffs for fully informed consent).
36. The plaintiffs note that, until 2020, Mr Zhang was a director of both VIP Sale and Giant. The plaintiffs say that, in dereliction of their duties, VIP Sale, its sole director Mr Zhang, and its acting director Ms Cai, have neither provided to Haixin access to all of the books and records of VIP Sale (including those obtained or that should have been obtained) in the course of Mr Zhang acting as director of Giant, nor has any of them provided any report to the Court as to what records existed and what records are held.
37. As noted above, complaint is made that funds for Giant were raised on the security of the trust property (for the private benefit of the Zhang and Fang defendants), in circumstances where that ability was leveraged off the plaintiffs' contributions and the fourth, fifth and sixth defendants were not required to contribute (as the plaintiffs maintain they had agreed to do). The plaintiffs maintain that this was a "nefarious scheme" and one which could not have been planned, executed and implemented without using the position of Giant and the trust property that Giant was purchasing and ultimately owned and controlled.
38. In their submissions, the plaintiffs catalogue a number of instances about which they make complaint in this regard. I do not propose here to recount the detail of those complaints (particularly as they cannot here be determined). I simply note that they include complaints about: a sum of $1.2 million paid by Giant to VIP Sale and transferred by VIP Sale to Ozjian's bank account; entry into the building contract with Urban Apartments at 18% per annum interest rates, without any construction finance in place; the reference in the documents to a Ninth Avenue partnership loan; and Hai Tao's withdrawal from the project (allegedly without reference to the pre-emption rights) followed by the apparent grant of security to Hai Tao over the Burleigh Street Site and entry into the 2018 Unitholders Deed. The plaintiffs say that there must have been a large quantity of messages between the officers and persons acting in the management of the trusts, and also with professional advisers, about all these matters.
39. The plaintiffs point out that no evidence has been led as to: what records of VIP Sale itself or of Giant are in the control of VIP Sale; what records are in the personal control or custody of Mr Zhang or Ms Cai, or in the office of VIP Sale; and what records are held by its accountant or other agents; nor as to what records Giant has in its control. The plaintiffs contend that there must have been many communications about the bank transactions that are in evidence involving Giant (including discussion about raising funds for the trustees and applying those funds to the various payments that the trustees have made), and for the various transactions that have occurred in the name of or for the purposes of the trustees.
40. Reference is also made to evidence that Mr Zhang has communicated with Ms Cai and Ms Fang using WeChat concerning the affairs of the trusts; and it is said that it is likely that Mr Zhang is in possession of a great quantity of this kind of information (whether by WeChat messaging, email or other forms of electronic commerce), created or obtained in the course of administering the trusts.
41. Further, the plaintiffs maintain that Mr Zhang must have records of communications in relation to the negotiation and implementation of the arrangements for Hai Tao's departure from the venture and for the entry of Clarence Property Group and PJE918 into the venture (both with the principals of the relevant companies and professional advisers), the plaintiffs submitting that those records form part of the records of Giant (of which Mr Zhang was a director at the time), citing Wentworth v De Montfort (1988) 15 NSWLR 348 at 355-356; Hocking v Director-General of the National Archives of Australia [2020] HCA 19; (2020) 94 ALJR 569 at [232]-[233] per Edelman J). The plaintiffs say that this would extend also to notes made by Mr Zhang of his communications with others in negotiating or implementing any step in the transactions which involved the exercise of power or duties on behalf of either trustee (or those which placed Mr Zhang in a position of conflict or in a position to obtain advantage - on the basis that in such a case the trustee would owe obligations of disclosure to the beneficiaries and Mr Zhang would owe obligations as director of a trustee company to make his knowledge and information available to the trustee to enable it to comply in turn with its obligations). The plaintiffs say that corresponding obligations were also owed by Mr Elias in relation to Giant; and that his records of this kind are also liable to be obtained and produced by Giant to its beneficiaries.
42. As far as documents of legal advisers are concerned, reference is made to Alexiou v Alexandra White t/as HWL Ebsworth Lawyers [2021] NSWSC 485, where the question as to for whose benefit solicitor's file notes had been made had arisen, and where the absence of direct evidence in relation to the file notes was referred to by Cavanagh J (see at [61]). The plaintiffs in the present case say that, in the absence of evidence from the trustee and its agents in the present case, doubts on questions as to what the records comprise and as to their accessibility should be resolved against the trustees and agents.
43. The plaintiffs submit that neither the trustees nor Mr Zhang can say Mr Zhang's knowledge and access to information and documents is or was held or enjoyed by him only in his capacity as a director and agent of Giant and not also on behalf of VIP Sale (which he was representing on the board of Giant). It is submitted that Mr Zhang's knowledge and information were obtained as a result of his use of position as director of VIP Sale. Further, the plaintiffs say that Giant is not entitled to deny to VIP Sale (and consequently to the plaintiffs) information and records that should be available to VIP Sale's representative director, or information and records that VIP Sale is entitled to have pursuant to cl 69 of the Everspring Develop Group Unit Trust Deed or cl 13.1 of the Management Agreement.

Directors/Officers Orders

1. As to the orders sought for production and access to information and documents from officers and agents of VIP Sale, the plaintiffs say that the same principles as to standing that are applicable in respect of Giant (as discussed above) apply to enable the plaintiffs to enforce disclosure from officers, agents and other persons who owe obligations of confidence to VIP Sale as trustee of the Burwood 168 Unit Trust, or who have control of trust records or information.
2. In that regard, the plaintiffs note that there is no dispute that Mr Zhang is a director. The plaintiffs say that there is sufficient evidence that Ms Cai has acted as a director, or at least has taken part in the management of both VIP Sale and Giant, such that Ms Cai has obtained information from the use of a position in management and owes to each of VIP Sale and Giant obligations of confidence. The plaintiffs say that the same is true "to a substantial but lesser extent" of Ms Fang (though they concede that this may not rise to the level of Ms Fang acting as a director); and they say that the specific enquiries made of Ms Fang concern transactions in which she was active.
3. The plaintiffs say that control of trust documents or information is a sufficient basis for an order for production of those documents or information against the person in control of those trust records, referring to Iacullo v Murr (unreported, 3 September 2010, SC 2010/257118) where Bryson AJ made orders for the production of books, records and information against the sole director of three de-registered trustees companies and one still registered trustee company on the basis that the overwhelming probability was that the director had those under his control (see at [7]). The plaintiffs argue that this is the case even if (which was not the case for the de-registered trustees in Iacullo v Murr) the trustee still exists and is joined in those orders.
4. The plaintiffs refer in this regard to the observation by Professor Finn (at [194]-[196]) in Fiduciary Obligations to the effect that a person who has been given possession of or control over another's property for some purpose (with no right to use the property for his or her own benefit) will readily be seen to be in a fiduciary position, coloured by the trust and confidence in virtue of which the property was received (reference there being made to Soar v Ashwell [1893] 2 QB 390 at 397 per Bowen LJ).
5. Noting that the cases in which the above principle has been applied have been cases of agency, the plaintiffs here characterise the position of a director or manager of a trustee company as a paradigm case of agency.
6. The plaintiffs also refer to the special position of directors of trustee companies (pointing in this context to s 197 of the Corporations Act), the obligations of VIP Sale as to record keeping and disclosure (both under s 286 of the Corporations Act and the terms of the Burwood 168 Unit Trust Deed), and to VIP Sale's duty, as trustee, to hold (and apply bona fide for the benefit of its unitholders) the rights and powers that it enjoyed under the Everspring Develop Group Unit Trust Deed and under the Management Agreement.
7. The plaintiffs say that, to the extent that VIP Sale cannot discharge its obligations of disclosure because the directors and agents have not discharged or will not discharge their obligations to put it in possession of information and records created or obtained in the course of acting as officers or agents (or otherwise using their positions as managers of its business or affairs), then sub-s 197(1)(a) of the Corporations Act is engaged. Further, the plaintiffs say that the breach of trust in failing to obtain and keep proper records would deny to VIP Sale the right to indemnity against such liability; and hence s 197(1)(b)(i) is engaged.
8. Section 197 of the Corporations Act renders a director liable to discharge the whole or a part of the liability incurred by a corporation as trustee if the corporation has not discharged and cannot discharge part or all of that liability and is not entitled to be indemnified against the liability out of trust assets solely because of, inter alia, a breach of trust by the corporation.
9. The plaintiffs say that nothing in the text of s 197 limits its application purely to monetary claims; nor is a claim for production and access to information and documents free of financial consequence for the trustee (referring to the passages from Jacobs' Law of Trusts cited above). Emphasis is placed in this context on the observation in McLean v Burns Philp (at 635E-F), after referring to the beneficiary's right to see trust documents, that "it would be wrong to compartmentalise the rights of beneficiaries under the law of trusts" and that the beneficiary's "real right" is "to approach the court for the appropriate order for performance of the trust".
10. Thus the plaintiffs maintain that, whether directly under s 197 of the Corporations Act or by reason of personal control, or derivatively under the beneficiary's standing to seek administration relief, Haixin has standing to seek relief against the director (Mr Zhang) and acting director (or perhaps manager) (Ms Cai) of VIP Sale.
11. As to Ms Cai's position as acting director, reference is made to the definition of director in s 9(1) of the Corporations Act and to the notes to the 2016 Financial Statements for Burwood 168 Unit Trust (at Ex A, pp 189-195) prepared by VIP Sale's accountant (Ms Huang). The plaintiffs draw particular attention to Note 1, to the effect that the directors of the trustee company have prepared the financial statements of the trust; and to the standard form Trustees' Declaration in those financial statements, which (though unsigned in the copy provided to the plaintiffs) concludes with execution clauses naming two trustees (Aqua Blu and Mayland). It is noted that the 2017 financial statements (at Ex A, pp 196-202), the 2018 financial statements (at Ex A, pp 203-209) and the 2019 financial statements (at Ex A, pp 210-216) follow the same form, as do the 2020 financial statements, which were recently provided to the plaintiffs albeit that those are signed by Mr Zhang above the name of Aqua Blu and by Ms Cai above the name of Mayland (with the compilation report signed by Ms Huang).
12. The plaintiffs submit that Ms Cai has thereby taken responsibility for the preparation, accuracy and fairness of the trustee (VIP Sale's) financial statements (including the opinion as to its solvency); and it is said that Ms Cai clearly has been and continues to be an acting director of the company.
13. In addition, it is noted that: Ms Cai and Mr Zhang are described in the 30 September minute as the "Business Partners" in VIP Sale; Ms Cai signed the Hai Tao agreement on behalf of VIP Sale (and the plaintiffs believe that she probably prepared it or arranged for its preparation); Ms Cai presented the Chinese language agreement to the plaintiffs (and again the plaintiffs believe that she probably prepared it or arranged for its preparation); and Ms Cai attended the auction for the Burwood Road Site on 29 September 2015 with Mr Elias. The plaintiffs further note that: according to 12E, [12H], [12I], [12N], [12O], [12R], 13(iii), 22(iii)(2), 36(v), 37, 38, 47(iii), 56(iii), (vi), (vii), 56(ii), and 56(i) of her defence, Ms Cai and her staff provided information to Ms Fang to pass on to Ms Wang concerning the venture; and, according to her defence at 22(iii)(1), from November and December 2015 Ms Cai personally took steps to procure a mortgage loan ultimately secured over the Burwood Road Site to enable part of the contributions of Aqua Blu, Ozjian and Mayland to the Burwood 168 Unit Trust to be funded.
14. It is said that on behalf of VIP Sale: Ms Cai transferred money directly from Mayland to the vendor of the Burwood Road Site, on behalf of Giant ($100,000 on 16 December 2015; and $198,356 on 24 December 2015); Ms Cai directed Ms Fang to pass money through Ozjian's bank account to VIP Sale (and the plaintiffs say that Ms Cai appears also to have been operating VIP Sale's bank account and received and returned substantial amounts of the same money); and Ms Cai took part in the negotiation of the 2018 Unitholders Deed, at her business premises.
15. The plaintiffs say that the first to seventh defendants were promoters of the venture, noting that the principles concerning promoters (though usually applied in respect of companies) are equally capable of applying to other structures, such as partnerships (citing United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49 at 5-6 per Gibbs CJ; and Australian Breeders Co-operative Society Ltd v Jones and Others (1997) 50 ALR 488 at 516 per Wilcox and Lindgren JJ). The plaintiffs say that these principles must also apply to the promotion of investment through unit trusts.
16. The plaintiffs point to the chronology as to: the timing of the incorporation of Giant on 25 August 2015 (shortly before it purchased the Burwood Road Site property at the auction held on 29 September 2015); Giant's naming on the contract for sale as the purchaser "as trustee for the Everspring Develop Group Unit Trust" (although that Trust was yet to be constituted); and that on the day after Giant was incorporated (being 26 August 2015) the ABN for the Everspring Develop Group Unit Trust was established. The plaintiffs argue that before the Everspring Develop Group Unit Trust was constituted it was being promoted by Giant and its then principals (the first to sixth defendants); and they say that in those circumstances, acts taken using the position of the putative trustee (or on its behalf) in advance of the formal constitution of the trust will be acts for which the persons acting are responsible to the trustee as agents, because they are promoters.
17. It is said that Burwood 168 Unit Trust was conceived and established as a part of Giant's fundraising activities and as an integral part of its venture structure, and that this exposes the promoters to responsibility in terms of record keeping and the provision of information. It is submitted that they owe (retrospectively) the same obligations as any other agent to the trustee later established, even in respect of acts, records and information occurring or arising earlier than the actual constitution of the trust. Similarly, in respect of their actions taken using or on behalf of the Burwood 168 Unit Trust before it was formally constituted, it is said that the promoters are responsible as agents to keep and make available records of their actions as if they were duly appointed agents of an existing trustee.
18. The plaintiffs contend that the actions of the first to sixth defendants confirm the view that they were all promoters of the Everspring Develop Group Unit Trust through the Burwood 168 Unit Trust to the plaintiffs; and hence it is submitted that each of the first to sixth defendants was in a position of conflict and that they (and VIP Sale) were obliged to disclose every material fact to the plaintiffs.
19. The plaintiffs emphasise that the first to sixth defendants did not merely deal with the plaintiffs on behalf of a proposed entity later nominated as VIP Sale; their private companies also contracted directly to establish the plaintiffs' participation in the venture. It is said that the Chinese language agreement demonstrates a mutual aim of the kind described by McDougall J in Management Service Australia Pty Ltd v PM Works Pty Ltd [2017] NSWSC 1743 (at [188]). The plaintiffs contend that under this contract there was mutual trust and confidence that each party would advance its agreed contribution as the price of its own participation in the agreed share of equity, and as consideration for the reciprocation of the others, in order that the mutual goal of raising the agreed sum of $9.36 million to fund a 40% combined stake in the overall venture should be achieved, and that it might be prosecuted in the manner and time that was represented in that instrument as their agreed goal.
20. As to Ms Fang, the plaintiffs say that Ms Fang actively and in person introduced the plaintiffs to the venture; and that she did so at the suggestion of the first and third defendants, particularly through Ms Cai. The plaintiffs emphasise that in their defence, the Zhang defendants (insofar as they allege that they passed on information to the plaintiffs through Ms Fang) accept that they were establishing the venture and dealing with the plaintiffs to achieve that. It is submitted that the Zhang defendants were engaged in fundraising and that (whether Ms Fang's role in this was as the plaintiffs' agent, defendants' agent, or independent broker through which it was expected communications would be received) this was communication by Ms Cai, Ms Fang and Mr Zhang with the plaintiffs in order to establish the venture.
21. The plaintiffs say that Ms Fang was not a mere "conduit pipe". It is said that, from the beginning, at the incorporation of Giant, Ms Fang had an interest and stood to gain in establishing the venture. It is noted that it was Ms Cai and Ms Fang who presented the Chinese language agreement to Ms Wang for signature, but that it was Ms Fang who presented the Burwood 168 Unit Trust Deed to Ms Wang for signature and Ms Fang who subsequently, in March 2016, emailed a signed copy of the Chinese language agreement (but not the Trust Deed) to Ms Wang.
22. The plaintiffs say that the allegation by the Zhang defendants (that Ms Fang was the plaintiffs' agent to receive disclosures, and that she did receive disclosures) is an allegation that disclosures were being made and that there were communications to Ms Fang for that purpose. It is said that the suggestion of agency made by the Zhang defendants is an attempt to place on Ms Fang the sole responsibility for any non-disclosure by Ms Fang to the plaintiffs, in failing to pass on the disclosures made by Ms Cai, Mr Zhang and VIP Sale (the plaintiffs referring to the Zhang defendants' defence at 12G). The plaintiffs say that this information must have been obtained from use of the position of the trustees or putative trustees and was conveyed in order to raise finance for the trustees or putative trustees.
23. The plaintiffs point out that this is an allegation made by the Zhang defendants not only against the plaintiffs but also against Ms Fang. It is said that it is vexatious for the Zhang defendants to make these allegations and then to withhold the records of the alleged communications. It is said that they are likely to be records of the Burwood 168 Unit Trust (if not also of Giant), because of Ms Cai and Mr Zhang's roles as promoters, or because they were communications for the purpose of fund raising by the trustees.
24. The plaintiffs say that both they and Ms Fang are entitled to know precisely what is the information involved in these alleged disclosures. They contend in effect that a defence of disclosure to an agent should specify what was disclosed. The plaintiffs say, further, that a beneficiary is entitled to see the trust records and that it is no answer that communications have been made with her agent (particularly when it is alleged that the agent had an interest of her own, and was offered a benefit, namely relief from her obligations to contribute to the venture).
25. It is said that Ms Fang must also produce the communications of this kind which she received from or sent to other defendants. The plaintiffs accept that Ms Fang had authority to make drawings on the bank account of Haixin, as and when directed by Ms Wang (an arrangement that they say was in place because Ms Wang was frequently overseas); but the plaintiffs say that it is not necessary on the present application to resolve the Zhang defendants' allegation (which the plaintiffs deny) that Ms Fang was agent for the plaintiffs for all purposes in relation to real estate investment (including the Burwood Development) and thus authorised to receive all communications and information in respect of the Burwood Development.
26. The plaintiffs say that: if Ms Fang was the plaintiffs' agent to receive and send such communications, then they are the plaintiffs' records and should be produced; if Ms Fang was not the plaintiffs' agent to receive and send them, she was communicating or undertaking to communicate on behalf of others and not merely on her own behalf and again is an agent with control of the records of others who are liable to produce them by virtue of their roles as promoters and agents for the Trust; and, in either event, Ms Fang was involved on her own behalf in promoting to the plaintiffs the venture in which she was clearly interested (and hence had a conflict of interest).
27. In summary, as to the Fang defendants' obligations to make disclosure, the plaintiffs say that the Fang defendants were promoters of the venture (as they were involved in establishing Giant, the Everspring Develop Group Unit Trust, the Burwood 168 Unit Trust and in the appointment of VIP Sale as trustee of the latter); that this role did not end with promotion and that Ms Fang had an ongoing role in fundraising, particularly from the plaintiffs, and in collecting funds for transfer to Giant or VIP Sale (including her role in the dealings relating to various bank transactions about which the plaintiffs seek information and in the negotiations and arrangements for Giant to borrow against the trust property). The plaintiffs say that Ms Fang therefore had a management role in the venture (albeit a role likely to be subordinate to that of Ms Cai and Mr Zhang) and that Ms Fang was both a promoter and an operator.
28. It is submitted that Ms Fang took part in activities that determined the positions of both VIP Sale and Giant and thus has acted on behalf of or using the positions of the trustees; and that she must have records of those activities which, by virtue of control, are disclosable even if her position was something less than that of a manager.
29. In respect of Ms Fang's authority to draw on Haixin's account, it is said that Ms Fang owed direct equitable obligations of confidence which oblige her to disclose records and report her activities in that capacity, as well as the obligations of a fiduciary which oblige her to disclose all material facts relative to the obvious conflicts that she held. Further, it is said that Ms Fang was sufficiently closely involved in using her personal association and influence over the plaintiffs in her promotional activities that she ought be held to have been in a relationship of trust and confidence importing direct fiduciary obligation.
30. By way of example as to how the alleged failure by the defendants to supply trust records and accurate information has prejudiced the plaintiffs in their pleading, the plaintiffs refer to the respective defendants' pleadings in their defences as to the allegation that the $8.4 million NAB loan to complete the purchase of the Burwood Road Site was not disclosed to the plaintiffs (see [22] of the statement of claim). Referring to [22] of the defence of the Zhang defendants and [18] of the amended defence of the Fang defendants, the plaintiffs say that a fact disclosed by one fiduciary is pleaded by the plaintiff beneficiary and then denied by another fiduciary; and that it is also denied by the very people who made the "disclosure" in the first place. The plaintiffs complain that this behaviour has been productive of "enormous difficulty, delay and cost in getting at the truth" and that it ought sound in costs and other appropriate measures to put such behaviour to an end (the plaintiffs here invoking the principles in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303; [2013] HCA 46 (Expense Reduction) at [56]-[57]).
31. It is said that the Zhang defendants are under a duty to provide full disclosure and information upon demand from the principal, not merely of the information originally disclosed to the putative agent but also of the manner and circumstances in which the earlier disclosure was communicated to the agent or putative agent.
32. The plaintiffs also complain as to inconsistency in the information provided in relation to the $8.4 million NAB loan (referring to a letter dated 1 July 2020, the spreadsheets supplied in 2020 (see Ex A, pp 181; 183), and a letter dated 10 November 2020 from the solicitors for the Zhang defendants); and referring to the defences filed by the respective defendants as to the said loan. The plaintiffs say that it is important to conduct a reconciliation of the payments of interest made by or on behalf of VIP Sale, to see if those are confined to a 40% share of the interest paid by Giant and whether other Everspring unitholders contributed to Giant's interest burden rateably or at all. The plaintiffs maintain that, if the $8.4 million was advanced by Giant rateably to VIP Sale, Hai Tao and Diamond Bay (as is now suggested by the Zhang defendants) then there must have been discussion, correspondence and messages about this between not only the first to sixth defendants, but all the defendants, as well as Hai Tao; and that these records should be produced.
33. It is noted that in the letter dated 20 April 2021 (which enclosed a transaction listing) the solicitors for the Zhang defendants stated that 40% of the $8.4 million loan to Giant "was used in lieu of cash contributions by VIP Sale to Giant" (see Ex B p 5) but that the Zhang defendants now appear to accept that there is some uncertainty as to the character of that transaction (i.e., whether there was a loan from Giant to VIP Sale for that amount and subsequent loans by VIP Sale to unitholders, or whether VIP Sale was simply required to service interest payments on that proportion of the loan by way of contributions to Giant), and that this uncertainty is attributed by the Zhang defendants to the fact that the arrangements were not separately documented (see Ex B p 5 at [19]).
34. The plaintiffs have no confidence that the Zhang defendants have made available to their solicitors their devices for inspection of all contemporaneous communications on this subject, or have given full disclosure of all the places where such records might be held, or made enquiry of Ms Huang, Ms Fang or any others with whom they dealt on these matters (noting that the 2020 financial statements of the Burwood 168 Unit Trust, signed by Ms Cai and Mr Zhang on 3 May 2021, make no reference or provision in respect of any such uncertainty about the character of the transaction and proceed in the same way as the 2019 unsigned financial statements). The plaintiffs say that this indicates that Ms Cai and Mr Zhang are reckless as to the truth and accuracy of any formal statement that they make regarding the affairs of VIP Sale.
35. The plaintiffs further note that the Zhang defendants' solicitors' letter dated 20 April 2021 (Ex B p 5 at [21]) contains an assurance that neither Aqua Blu nor Mayland holds any expectation of being repaid the "interest" but that this is inconsistent with the 2020 financial statements which proceed on the basis that these contributions were loans to Giant.
36. The plaintiffs thus contend that the account as to loans is artificial and they say that they are entitled to see every primary record and every accounting record concerning these transactions, and all of the correspondence, messages, notes, voice recordings and so on that passed by email, text, WeChat or otherwise between the participants on the VIP Sale side and the Giant side, with each other and their advisers or with the Bank on the subjects described above, and to have full and proper explanations thereof. The plaintiffs further say that if the defendants cannot be trusted to comply then they should produce their devices for examination.
37. As to the arrangements made for the payment of the deposit for the acquisition of the Burleigh Street Site, in respect of which Haixin contributed an amount of $129,610 on 17 March 2016 (the day after exchange of contracts), the plaintiffs point to inconsistency between the spreadsheets initially provided by Ms Huang in mid-2020 (Ex A p 183) and the 22 April 2021 transaction list. The plaintiffs complain that it is not clear what was done with the plaintiffs' money (suggesting that this may be "another deposit paid by persons who recouped themselves from trust money").
38. The plaintiffs contend that the arrangements in relation to the deposit are an instance of Ms Cai acting as a director or agent of VIP Sale and of Ms Fang acting at Ms Cai's direction to pay Haixin's contribution not into Mayland's account (which it is said was not in conformity with Ms Fang's obligations to Haixin to pay VIP Sale as directed). The plaintiffs say that the use of another entity as a conduit to conduct what were affairs of the trustee, VIP Sale, demonstrates that the scope of records of the Burwood 168 Unit Trust is not confined narrowly. In particular, they say that this is not limited to bank accounts in its name, correspondence with its accountant, or correspondence expressly in the trustee's name; rather, that it extends to all records of acts taken by agents in its name or using its position, whether or not done so expressly.
39. The plaintiffs submit that Ms Fang's records of communications on this transaction are liable to production: first, on the basis that Ms Fang was acting in the management of VIP Sale in following the directions of Ms Cai as to how the payment was to be made (i.e., to Mayland), similar to her role in collecting funds in the transactions; and, second, on the basis that, in exercising her authority to make transactions on Haixin's bank account, Ms Fang owed an obligation of confidence and stood in a fiduciary position for that purpose, and Ms Fang's communications with others in so acting must be regarded as Haixin's confidential information and must be produced to the plaintiffs.
40. The plaintiffs say that it is likely that Ms Fang was acting in both of these capacities at once and that, being in a position of conflict (given the obligations of a person authorised to draw on another's money), there is a further obligation of disclosure (the plaintiffs there referring, among others, to DIF III Global Co-Investment Fund LP v Babcock & Brown International Pty Ltd [2019] NSWSC 527 at [164]-[166]).
41. Insofar as the 22 April 2021 transaction listing does not disclose a contribution by Ozjian to the deposit for the Burleigh Street Site, the plaintiffs say that Ms Fang ought to disclose her records of arrangements that excused the Fang defendants from contributing rateably to the purchase of the Burleigh Street Site (and they contend that they were entitled to be informed of this before giving a direction to Ms Fang to authorise her to draw on Haixin's bank account to fund a venture in which Ms Fang's company was interested and would obtain the additional benefit of an expanded project without contributing rateably).
42. Further, the plaintiffs make detailed submissions as to various of the deposits and withdrawals disclosed in the bank statements and in the transaction listing with which they have been provided, complaining that there has not been an adequate explanation of various transfers (including a withdrawal of $1.2 million on 22 March 2016 from Ozjian's bank account and subsequent transfers through to early April 2016) nor of the description of various of the transfers as having been "in error".
43. The plaintiffs say that, for the fact of "error" to be known by the Zhang defendants, there must have been: communication with Ms Fang or whomever else was operating on Ozjian company's bank account; and either communication with someone on behalf of Giant, or personal knowledge of the affairs of Giant in respect of this transaction; and that the records of such communications and knowledge should be produced.
44. The plaintiffs complain that: no proper explanation of the transactions to which they have referred has been made in any of the schedules provided; the true purposes remain unexplained; there have been inconsistent explanations; and they say that it seems that Ms Fang was at the direction of Ms Cai using Ozjian's account to collect funds which were paid into and out of VIP Sale's account. The plaintiffs say that there must have been communications about these decisions.
45. Complaint is made that, even on their own case (as put in the Zhang defendants' particulars of 10 November 2020) the Zhang defendants leveraged $1.547 million for the Burwood Road Site alone off the plaintiffs' contributions, without telling Ms Wang.

Corporations Act Order

1. The relief sought in prayer 4 in the notice of motion (relying on s 247A or 233 of the Corporations Act) is put, in effect, as a back-up; in that the plaintiffs say this will pick up any company records that are not trust records.
2. It is noted that Haixin is a 40% shareholder of VIP Sale and that the purpose of VIP Sale (at least since the time at which it was decided to use it as trustee of the Burwood 168 Unit Trust) has been only to be the trustee of that trust. It is said that the activities of promoters of that trust would relate that purpose back to the commencement of those promotional activities, and at least to 25 September 2015 (the ostensible commencement date of the Burwood 168 Unit Trust). The plaintiffs say that it is reasonable for Haixin to look into the earlier history of VIP Sale to see why the company was selected for the trust activities. (Pausing here, Counsel for the Zhang defendants submits that this last submission amounts to a textbook definition of "fishing". That may or may not be the case but the plaintiffs contend that such a complaint is not an apt answer to an application for company books and records such as the present.)
3. The plaintiffs say that there are ample grounds for concern as to the integrity and probity with which the company's affairs have been conducted and, in those circumstances (and in the absence of any opposition from VIP Sale or evidence indicating any basis for limitation), access to all the records of the company is appropriate.

Transaction List Orders - provision of accounts

1. Prayers 9 and 11 of the notice of motion seek the provision by VIP Sale and Giant, respectively, of formal statements of the Burwood 168 Unit Trust and the Everspring Develop Group Unit Trust accounts, respectively.
2. The plaintiffs say that VIP Sale has not disclosed any such statement from Giant of Giant's transactions. They complain that the list of VIP Sale's transactions provided on 22 April 2021 (after the filing of the notice of motion) is opaque in the use of the term "error" and as to its inconsistency. The plaintiffs say that a proper statement of accounts would have the true purpose of each payment and that the trustee must give its full mind to that and disclose what it knows. The plaintiffs maintain that they are entitled to an account which states the purposes for which money was received and paid; and that, where there was "error", its nature and the reason for it ought to be frankly explained in the account.
3. It is submitted that such an account can be ordered at any stage of the proceedings (referring to r 46.2 of the UCPR). It is said that there is no preliminary question in the present case; that the terms of the Trust Deeds and the general law of administration of trusts establish Haixin's entitlement and that "the hopeless spreadsheets and inconsistent information provided to date illustrate how needful it is".

Discovery or Preliminary Discovery Orders

1. Prayer 13 of the notice of motion seeks discovery or preliminary discovery from VIP Sale in the categories which appear in the schedules thereto (see Ex A, pp 155-162). The plaintiffs point out that this was the course taken in Power v Ekstein [2010] NSWSC 472 where (at [22]) there was a preliminary question concerning entitlement to an account.
2. The plaintiffs say that, although there is no such preliminary question in the present case, it would have the advantage of avoiding an "unduly technical dispute" about what records are (and are not) trust records in a case that cries out for disclosure in any event (again referring to Expense Reduction at [56]-[57]). It is noted that in McLean v Burns Philp (at 643D), Young J pointed out that, in an administration suit, discovery is not really an issue because it would be subsumed in a general administration order.
3. The plaintiffs say that the main reason to consider discovery or preliminary discovery in the present case would be to "cut off any temptation to the defendants to prolong the obstruction by coming up with every argument imaginable as to what constitutes trust records, or disputing the management roles of the various defendant actors who have so evidently been acting as insiders in the administration of these trusts".

Interrogatories orders

1. The plaintiffs do not make separate submissions on these orders but set out throughout their written submissions their complaints as to incomplete disclosure of matters relating to the project or venture, and they submit that such information as they have requested must be in the knowledge of the various defendants.

Zhang defendants' submissions

1. The Zhang defendants maintain that the present application is not interlocutory in any substantive sense; that it seeks final relief by way of assertion of legal and equitable rights to documents and information held by the defendants; and that the bases for the asserted entitlement are premised on allegations of fact (without any pleading) which are disputed (including allegations that some defendants are de facto directors of companies and allegations of statutory oppressive conduct) and which in large part traverse the disputed issues of fact in the proceeding which are to be resolved at trial. As adverted to already, I consider that there is much force to this observation but (as I discuss in due course) fundamentally this application turns on what needs to be established in order to invoke the Court's supervisory jurisdiction over the administration of trusts.

Application by Haixin to VIP Sale's books and records

1. The Zhang defendants accept that Haixin, as a unitholder in the Burwood 168 Unit Trust, is entitled to inspect the books and accounts of the trust held by the trustee, VIP Sale. However, the Zhang defendants maintain that those documents have already been provided to the plaintiffs.
2. It is noted that the plaintiffs' application seeks much more than the trust documents of the Burwood 168 Unit Trust (of which Haixin is a beneficiary), in that it also seeks: (a) documents held by Giant, as trustee of a different trust, the Everspring Develop Group Unit Trust (of which neither plaintiff is a beneficiary); (b) documents held by individual defendants in their capacity as officers of Giant or other corporate entities (to whose documents the Zhang defendants say the plaintiffs have no entitlement); (c) documents held by individual defendants which are otherwise not trust documents of the Burwood 168 Unit Trust (which the Zhang defendants say the plaintiffs have no entitlement to inspect); (d) orders that the defendants answer the plaintiffs' interrogatories (which it is said go well beyond any entitlement of the plaintiffs to be provided with information as to the administration of the Burwood 168 Unit Trust); (e) orders under s 247A and/or s 233 of the Corporations Act authorising the plaintiffs to inspect the books of VIP Sale; (f) orders for an accounting under r 46.2 of the UCPR; and (g) orders for discovery or preliminary discovery.
3. The Zhang defendants say that much of the content of the plaintiffs' written submissions appears directed to presenting a version of the facts at issue in the proceeding in a manner critical of the defendants' conduct (including allegations of dishonesty) and inviting speculation as to how and why the investment structure was set up for the purposes of the project. The Zhang defendants say that the plaintiffs' application seeks to have a mini-trial of the issues in dispute to determine, on an interlocutory basis prior to any evidence or discovery, whether the facts in issue require the defendants at this stage of the proceeding to provide all the documents here sought. The Zhang defendants say such an approach inverts the trial process; and, if acceded to, is bound to frustrate rather than achieve the overarching purpose in s 56 of the Civil Procedure Act 2005 (NSW). (So, for example, reference is made to the plaintiffs' interest in the date of various documents and meetings in September and October 2015 and the retainers of the service providers who prepared the trust instruments, without (it is said) any explanation of the significance of those dates or retainers to any possible cause of action the plaintiffs might assert.) (Pausing there, the significance attached to the precise date of entry into particular documents was explained in submissions - in effect as going to the nature of the claim that would flow from the relevant conduct - see at T 48).
4. Since the Zhang defendants accept that Haixin, as a unitholder in the Burwood 168 Unit Trust, is entitled to inspect the books and accounts of the Burwood 168 Unit Trust (by reference to cl 69 of the Trust Deed for the Burwood 168 Unit Trust) they say that it is therefore not strictly necessary to consider the right of a beneficiary to seek disclosure of trust documents by order of the Court in the exercise of its inherent jurisdiction to supervise, and in appropriate circumstances intervene in, the administration of trusts (referring to Schmidt v Rosewood Trust Ltd [2003] 2 AC 709 at 724, 730; AIT Investment Group Pty Ltd v Markham Property Fund No 2 Pty Ltd [2015] NSWSC 216 at [85]-[96] per Bergin CJ in Eq).
5. However, the Zhang defendants say that it is necessary here to consider what is a book or account of the trust, i.e., what is a trust document in respect of which it is conceded that the plaintiffs have a right to inspect. Reference is made by the Zhang defendants to the observation by Brereton J at [30] in the Rinehart Trust Documents decision that dispute as to what may constitute a "document of the trust" is unsurprising because, as was said in Re Londonderry's Settlement [1965] Ch 918 (Londonderry) at 938, it has not been comprehensively defined, but that it includes at least documents containing or evidencing the terms of the trust, documents relating to the trust property and the accounts of the trust.
6. The Zhang defendants point to the consideration of this issue by the Court of Appeal in Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405 (Hartigan Nominees). Mahoney JA there observed (at 432F-433E) that the right of a beneficiary to have, on request, inspection of documents or disclosure of information in relation to the trust is, in general, limited to documents or information which is the property of the trust; that documents or information may be the property of the trustee and not, in the relevant sense, of the trust; and that the right of the beneficiary does not exist because alone the document is the property of the trustee or because it has come into existence for or in relation to the administration of the trust or the discharge of the trustee's duties. It is noted that his Honour there gave the example of notes made by a trustee of discussions with beneficiaries which, even though they were made to assist the trustee in exercising his or her powers, need not be disclosed to a beneficiary.
7. Relevantly, having regard to the emphasis placed by the plaintiffs on the Rinehart Trust Documents decision, the Zhang defendants point out that his Honour also noted that a beneficiary's rights to trust documents, as distinct from documents prepared by the trustee for his or her own purposes, is more limited than the rights of an incoming trustee to obtain documents from an outgoing trustee.
8. Reference is also made to Sheller JA's observation (at 444B-E) that in Londonderry the Court held that the trustees were not bound to disclose agendas of their meetings, correspondence passing between the trustees themselves or between the trustees and the appointors or any beneficiary and minutes of meetings of the trustees or appointors and other documents disclosing their deliberations as to how they should exercise their powers; and (at 444G-445A) that the preservation of the right of trustees not to disclose the motives and reasons actuating them in coming to their decision requires that documents such as minutes of meetings and agenda which are likely to reveal such motives or reasons or the subjective process of reasoning need not be disclosed to a beneficiary.
9. The Zhang defendants note that the principle that a beneficiary is not entitled to documents or information going to the discretionary decisions of trustees applies to day-to-day working discretionary decisions in the conduct of a business just as much as it does to discretionary powers under the trust instrument (citing Morris v Morris (1993) 9 WAR 150 (Morris) at 154.30-35).
10. In the Rinehart Trust Documents decision (at [35]), Brereton J noted that the above view of the class of "documents of a trust" has generally been adopted in Australia, and referred to Rouse v IOOF Australia Trustees Ltd (1999) 73 SASR 484; [1999] SASC 181 where (at [100]) Doyle CJ said: There must be various situations in which a trustee, particularly a trustee conducting a business, would be put in an impossible position if the beneficiary of the trust could, as a matter of right, claim to inspect documents in the possession of the trustee and relevant to the conduct of the business. It is readily conceivable that there will be situations in which an undertaking of confidentiality is not sufficient protection. The fact that the trust is one in which numerous beneficiaries have an interest, and the further fact that those beneficiaries may have differing views about the wisdom of the course of action being pursued by the trustee, only serve to emphasise, in my opinion, the need for the law to recognise some scope for a trustee to refuse to disclose information on the grounds that it is confidential and on the further ground that the disclosure is not in the interests of the beneficiaries as a whole. I make that observation on the basis and on the assumption that the ultimate right of the beneficiaries will be to have the trustee removed if they are dissatisfied with the approach of the trustee.
11. The Zhang defendants point to the error that has been recognised in seeking to apply rules developed in relation to traditional trusts to commercial trusts, referring to what was said by Lord Browne-Wilkinson in Target Holdings Ltd v Redferns (a firm) [1996] AC 421 (Target Holdings) at 435G-H, as approved by the plurality in Wellington Capital Ltd v Australian Securities and Investments Commission (2014) 254 CLR 288; [2014] HCA 43 at [13]): In the modern world the trust has become a valuable device in commercial and financial dealings. The fundamental principles of equity apply as much to such trusts as they do to the traditional trusts in relation to which those principles were originally formulated. But in my judgment it is important, if the trust is not to be rendered commercially useless, to distinguish between the basic principles of trust law and those specialist rules developed in relation to traditional trusts which are applicable only to such trusts and the rationale of which has no application to trusts of quite a different kind..
12. As adverted to above, the Zhang defendants also emphasise that the right of a beneficiary to inspect trust documents is different to, and more limited than, the right of a replacement trustee to take delivery of documents held by an outgoing trustee, pointing out that this distinction was critical to the Rinehart Trust Documents decision as to the nature of the documents which were required in that case to be produced to the incoming trustee (see that decision at [36]-[41]). In particular, the Zhang defendants point to the fact that (at [39]) his Honour noted that an outgoing trustee is subject to a duty of co-operation with the incoming trustee and must normally hand over to an incoming trustee all information and documents which relate to the administration of the trust, even if not belonging to the trust, so as to enable the incoming trustee to fulfil his or her duties (citing In the matter of the Bird Charitable Trust (2012) (1) JLR 62 at [23]-[29].
13. The Zhang defendants say that the distinction is one of ownership; that it is inherent in the concept of "trust documents" that they are trust property (Rinehart Trust Documents decision at [43]); and that, while an incoming trustee may be entitled to delivery of all documents relating to the administration of the trust (whether or not the documents are the property of the trust), a beneficiary's right of inspection is limited to "trust documents" of the kind referred to in the authorities which are themselves trust property.
14. As already noted, the Zhang defendants say that the plaintiffs have been provided with the "books and accounts" of the Burwood 168 Unit Trust, as properly understood in accordance with the above. It is also noted that the Burwood 168 Unit Trust does not conduct a trading enterprise; it is an investment trust the sole object of which is to enable its unitholders to invest in units in the Everspring Develop Group Unit Trust and thereby obtain an economic interest in the Burwood Development; and that transactions involving trust property are limited to the receipt of funds from unitholders and the deployment of funds to Giant for the purposes of the development.
15. Relevantly, the Zhang defendants say that the plaintiffs have been provided with the following: on 25 March 2020 (in response to a request made on 23 March 2020), the Trust Deed for the Burwood 168 Unit Trust and the 2018 Unitholders Deed; on 1 July 2020, the Trust Deed for the Everspring Develop Group Unit Trust and the Management Agreement, as well as further copies of the Trust Deed for the Burwood 168 Unit Trust and the 2018 Unitholders Deed and an explanation of the circumstances in which the 2018 Unitholders Deed was entered into by VIP Sale; on 13 July 2020 (in response to a request made on 3 July 2020), the financial accounts for the Burwood 168 Unit Trust for the years 2016 to 2019; the income tax returns for the trust for years 2016 to 2019 and the "investment account", being an Excel spreadsheet recording contributions to the trust and payments out of the trust (provided by VIP Sale's accountant); and, also on 13 July 2020 (in response to the same request), all bank statements for the Burwood 168 Unit Trust's bank accounts, together with unit certificates, register of allotted units and minutes of meeting of the trustee and unitholders on formation of the trust and VIP Sale's constitution and the contributions register showing contributions received from each unitholder.
16. The Zhang defendants point out that the letter providing the bank statements informed the plaintiffs that: VIP Sale does not prepare BAS statements; VIP Sale does not maintain a ledger for the beneficiary loan account; VIP Sale does not have any other documentation for assets purchased by the trust; VIP Sale does not have any finance or loan documents; VIP Sale does not have financial records stored in a bookkeeping system due to the infrequency of transactions; VIP Sale has not drawn any cheques; and that Mr Zhang does not have copies of any minutes of board meetings of VIP Sale or of unitholders of the Burwood 168 Unit Trust other than as already provided.
17. The Zhang defendants note that, on 20 April 2021, the plaintiffs were provided with a transaction list (to which the plaintiffs have referred as the 22 April 2021 transaction list since that was when it was received) itemising every receipt and payment of VIP Sale since it became trustee of the Burwood 168 Unit Trust, stating the amount of the payment, the person from whom the payment was received or to whom it was paid and the date it was received or paid. The letter also included copies of all bank statements since the set of statements provided on 13 July 2020 as well as an updated and corrected version of the contribution ledger recording contributions made by each unitholder. On 10 June 2021, the plaintiffs were provided with the financial accounts and income tax return for the Burwood 168 Unit Trust for the year 2020.
18. The Zhang defendants say that the "trust documents" of the Burwood 168 Unit Trust have therefore been provided to the plaintiffs, in that they have the trust instrument, all the accounts and tax returns of the trust, all bank statements, all primary accounting records and a complete transaction listing of every trust receipt and payment. In that regard, the Zhang defendants say that no point was taken as to who had possession of these documents; in particular, that, if Ms Cai or Mr Zhang had possession or custody of Burwood 168 Unit Trust documents, the view was taken that they remained documents to which the plaintiffs are entitled, and the Zhang defendants say that these have been provided to the plaintiffs.
19. The complaint by the Zhang defendants is that the 41 categories of documents sought by the plaintiffs go far beyond the books and accounts of the Burwood 168 Unit Trust or documents which are properly "documents of the trust".
20. For example, the Zhang defendants note that the plaintiffs seek: electronic versions of agreements to which the trustee (VIP Sale) is not party or which predate the formation of the trust (Categories 1 and 2); communications (including emails, text messages and WeChat messages) between defendants about the preparation of such agreements (Categories 3 and 5); communications between the defendants or between the defendants and Mr Elias about contributions to the project (Categories 6, 7 and 17); costs agreements, including original electronic files, which pre-date the trust (Categories 8 and 9); costs agreements which concern the Everspring Develop Group Unit Trust and Giant (Categories 10-16); communications (including emails, text messages and WeChat messages) between defendants about contributions from VIP Sale to the project and borrowings by defendants to fund their contributions to the project (Categories 17 and 19); documents relating the acquisition of the Burwood land by Giant as trustee of the Everspring Develop Group Unit Trust (Categories 20 and 25-28); communications (including emails, text messages and WeChat messages) between defendants about Hai Tao's exit from the project and agreements between Giant and Hai Tao (Categories 32 and 33); and documents relating to the property development undertaken by Giant as trustee of the Everspring Develop Group Unit Trust, including feasibility studies, loan agreements, development applications, construction certificate applications, minutes of project meetings and progress claims and supporting materials (Categories 35-41).
21. The Zhang defendants say that, on any view, nearly all of these documents will not be property of the Burwood 168 Unit Trust; rather, they will be the property of other entities or individuals who sent or received the communications or who brought the documents into existence. It is said that, to the extent the categories properly call for trust documents, they have been provided.

Access sought by Haixin to Giant's books and records

1. The Zhang defendants contest the plaintiffs' entitlement to inspect the books and accounts of the Everspring Develop Group Unit Trust or to compel VIP Sale to request access to those documents. The Zhang defendants point out (which is not denied) that neither plaintiff is a beneficiary of the Everspring Develop Group Unit Trust; and for that reason they say that the plaintiffs have no standing, or right, to invoke the jurisdiction to enforce a beneficiary's entitlement to trust documents or information of the Everspring Develop Group Unit Trust.
2. The Zhang defendants refer to the explanation given by Romer LJ in Butt v Kelson at 206 (relied upon by Seaman J in Morris) as to why, where trustees have an investment in a business conducted by others, documents in the trustees' hands which are books of account or other documents relating to such a business are not required to be disclosed to a beneficiary, namely (per Seaman J at 154.25): The other partners in partnership businesses in which the defendant as trustee is a partner are not in partnership with the beneficiaries of the trust estate. It would, it seems to me, to be an infringement of their rights to impose upon them the potential for the interference by a beneficiary in the workings of the partnership businesses.
3. Noting that Giant's position is that it neither consents to nor opposes the present application, the Zhang defendants say that if (notwithstanding their contention that the plaintiffs have no entitlement to documents of Giant or the Everspring Develop Group Unit Trust), access to those documents is granted to the plaintiffs then such relief should be limited to orders directed to Giant requiring the production of such documents.
4. The Zhang defendants resist any order that they be compelled to answer interrogatories as to the affairs of Giant or the Everspring Develop Group Unit Trust or any order that would require them to cause VIP Sale to exercise any right as a beneficiary of the Everspring Develop Group Unit Trust.
5. Insofar as the plaintiffs assert an entitlement to Giant's documents by reference to VIP Sale's position as a beneficiary of the Everspring Develop Group Unit Trust (referring to the right under cl 69 of the Everspring Develop Group Unit Trust Deed to inspect the books and accounts of the trust), the Zhang defendants say the following.
6. First, that VIP Sale, as trustee of the Burwood 168 Unit Trust, has an absolute uncontrolled discretion to exercise all or any of its powers as it sees fit and no unitholder is permitted to challenge VIP Sale's exercise or failure to exercise a discretion or power, nor is VIP Sale to be required to provide a reason for such an exercise or failure to exercise (referring to cl 62 of the Burwood 168 Unit Trust Deed). It is noted that (in cl 74 of the Trust Deed), where the trustee is a corporation (as VIP Sale is), the trustee shall act by resolutions of the board of directors in accordance with the trustee's constitution. The Zhang defendants say that Ms Wang cannot compel the board of directors of VIP Sale to exercise a right of inspection of the trust documents of the Everspring Develop Group Unit Trust (not least because she resigned as a director after refusing to attend meetings).
7. Second, that even if VIP Sale, by its board, exercised a right of inspection of the books and accounts of the Everspring Develop Group Unit Trust, it does not follow that such books and accounts would thereupon become the books and accounts of the Burwood 168 Unit Trust and be amenable to inspection by the plaintiffs. It is said that they would remain the property of the Everspring Develop Group Unit Trust and that the plaintiffs would have no entitlement to inspect them.
8. The Zhang defendants contend that what the plaintiffs are asking is that the Court should in effect "see through" the two-tiered trust structure and exercise supervisory control to compel VIP Sale to exercise the right of inspection of trust documents of the Everspring Develop Group Unit Trust for the plaintiffs' benefit, or otherwise require Giant to disclose such documents to the plaintiffs.
9. Insofar as the plaintiffs assert they have standing to seek such relief because they have standing to seek administration relief in respect of the Everspring Develop Group Unit Trust (being a creditor or beneficiary of the Burwood 168 Unit Trust which in turn is a creditor or beneficiary of the Everspring Develop Group Unit Trust) relying on McLean v Burns Philp, the Zhang defendants say that this decision is readily distinguishable. It is said that, as made plain at 637G, the standing of the plaintiff in that case was dependent on the sole beneficiary of the "downstream" trust being the "upstream" trust of which the plaintiff was a beneficiary. The Zhang defendants say that this is not the case here, noting that the Everspring Develop Group Unit Trust has other beneficiaries than VIP Sale (and that VIP Sale is only a minority unitholder).
10. In any event, the Zhang defendants say that even if the plaintiffs had standing to seek administration relief in respect of the Everspring Develop Group Unit Trust (which the Zhang defendants say they do not), disputed questions of fact should not here be tried in proceedings under r 54.3 of the UCPR, due to the absence of pleadings and an unwillingness to try such questions otherwise than on oral evidence (referring to Perpetual Trustee Co v Watson (No 1) (1927) 28 SR (NSW) 39; Re Donaldson (1912) 12 SR (NSW) 148). The Zhang defendants submit that it is not appropriate to grant administration relief based on disputed facts in advance of a trial of those facts.
11. For the same reasons, it is said that the plaintiffs are not entitled to Giant's documents or documents of the Everspring Develop Group Unit Trust which might be in the possession of Mr Zhang in his capacity as a former director of Giant or a current unitholder (through his and Ms Cai's company, Clarence Property Group) of the Everspring Develop Group Unit Trust. It is said to be irrelevant that Mr Zhang may also be a director of VIP Sale.
12. The Zhang defendants say that (while it is a matter for Giant whether it wishes to oppose the orders sought against it in this application) Giant's decision not to contest the relief sought against it does not mean that documents held by the Zhang defendants (which are their property and to which the plaintiffs have no entitlement), are similarly amenable to production. Thus it is again submitted that any orders for production of Giant and Everspring Develop Group Unit Trust documents should be limited to orders directed to Giant.

Interrogatories

1. Insofar as the plaintiffs seek an order that the Zhang defendants provide answers to the 28 questions set out in the plaintiffs' solicitors' letter of 7 April 2021 and to a further 4 questions set out in prayer 14 of the notice of motion, it said that those questions are in the nature of interrogatories.
2. To the extent that such an order is predicated on the plaintiffs having a right to such information, the Zhang defendants say that no such right or entitlement has been established. In particular, it is said that the answers sought are not "information" of the Burwood 168 Unit Trust to which the plaintiffs have any right to invoke the Court's supervisory jurisdiction to intervene in the administration of a trust.
3. It is noted that a beneficiary only has an entitlement to "information" of a trust to the extent that information is the property of the trust in the sense explained in the authorities; and that a beneficiary is not entitled to require the trustee to provide any and all information in the trustee's possession about the administration of the trust. The Zhang defendants say that such a supposed right would place an intolerable burden on trustees administering trading trusts or trusts conducting commercial enterprises.
4. Further, it is said that a review of the 32 interrogatories reveals that they are directed in the main to matters extraneous to the Burwood 168 Unit Trust, including questions as to: why or how Giant did various things in the course of the project or about the progress of the development (questions 1-6, 21-27 and (a)-(c) of prayer 14); the sale by Hai Tao of its units in the Everspring Develop Group Unit Trust (questions 14-20); and whether Mayland, Aqua Blu and Ozjian entered into any other agreements amongst themselves (question 28).
5. To the extent that the interrogatories are directed to decisions made by VIP Sale, as trustee of the Burwood 168 Unit Trust, it is noted that they seek an explanation from the trustee as to why it exercised its powers in the way it did (questions 8-10 and (d) of Prayer 14), which the Zhang defendants point out is the very thing that both the Trust Deed (see cl 62) and the authorities (referring to Londonderry and Morris) say a trustee is not obliged to provide to a beneficiary.
6. The Zhang defendants point to the following matters as discretionary considerations against the making of any order in the Court's supervisory jurisdiction over the administration of trusts (assuming that a prima facie case for the interrogatories were to be made out).
7. First, it is said that neither VIP Sale nor Mr Zhang is remunerated for the performance of its or his role as trustee of the Burwood 168 Unit Trust and director of VIP Sale, respectively; that they are volunteers; and that, in Mr Zhang's case, he is prevented from resigning as a director of VIP Sale in the absence of any other person willing to assume the role (a role which it is noted Ms Wang is not willing to assume herself, despite previously being a director of VIP Sale) or to nominate another person to assume.
8. Second, it is noted that the plaintiffs have sought to impugn the trustee's decisions in the claims they have made in the proceeding. It is said that an order for interrogatories at this stage would in effect require disclosure of the defendants' evidentiary case prior to the plaintiffs having to put forward their evidentiary case (and having failed to do so in accordance with the Court's orders); and that it would also subvert the intent of Practice Note SC Eq 11 (Practice Note) and the requirement that evidence precede disclosure.
9. To the extent that the interrogatories are pressed not as of right but by way of an application for interrogatories under Pt 22 of the UCPR, the Zhang defendants point out that no attempt has been made to establish that such an order is necessary at this stage of the proceeding and that the interrogatories on their face go well beyond the matters in issue in the proceeding (referring to r 22.2(a) of the UCPR).

Balance of relief sought

1. As to the balance of the relief sought on this application, the Zhang defendants submit as follows.
2. First, as to the submissions to the effect that Giant owes the plaintiffs direct fiduciary duties, that Ms Cai is a de facto director of VIP Sale and that all the defendants were "promoters" of the venture (such that all the defendants owe fiduciary duties to the plaintiffs), the Zhang defendants say that allegations of that nature cannot be determined on an interlocutory basis on the present application; rather, they are matters which would need to be pleaded and determined at trial. However, the Zhang defendants say that even if those allegations could be substantiated it does not follow that, because one party (A) owes fiduciary obligations to another party (B), that other party (B) has a private right to disclosure of documents and information held by the first (A). It is submitted that the allegation that the defendants are fiduciaries so far as the plaintiffs are concerned is irrelevant to the relief claimed in the application.
3. Second, insofar as prayer 4 seeks an order for the production of all of VIP Sale's books and records under ss 247A or 233 of the Corporations Act, the Zhang defendants say that s 247A grants a discretion to authorise a member to inspect books of a company and that the plaintiffs have not made out a case for the exercise of that discretion in their favour. In particular, it is said that the admitted desire to use those books to make or advance claims against the company, in litigation already commenced, is not a proper purpose for seeking access (referring to Mesa Minerals Ltd (ACN 009 113 160) v Mighty River International Ltd (2016) 111 ACSR 289; 241 FCR 241 (Mesa Minerals) per Katzmann J with whom Siopis and Gilmour JJ agreed, at 22; Cescastle Pty Ltd v Renak Holdings Ltd (1991) 6 ACSR 115; (1991) 9 ACLC 1333 (Cescastle) at 1335).
4. In any event, it is noted that s 247A is not intended as a substitute for discovery and that any inspection authorised will generally be limited to documents evidencing the results of board decisions (referring to Mesa Minerals at 22). As to s 233, the Zhang defendants say that the plaintiffs cannot seek relief under the oppression remedy in s 233 in advance of a trial on the facts and findings which would enliven the preconditions in s 232 of the Corporations Act.
5. (Pausing here, in reply submissions the plaintiffs cavil with the proposition that the desire to use books and records in order to advance claims already made is not a proper purpose for an application under s 247A of the Corporations Act - see below.)
6. Third, as to prayers 9 and 11, which seek an accounting under r 46.2 of the UCPR in the form of transaction lists and explanations of each receipt and payment of the Burwood 168 Unit Trust and Everspring Develop Group Unit Trust, the Zhang defendants say that the plaintiffs have already been provided with such a transaction list for the Burwood 168 Unit Trust; and, further, that the power under r 46.2 of the UCPR to order that an account be taken is dependent upon a party making a claim in the proceeding which involves taking an account. The Zhang defendants note that this is a rule directed to the manner in which relief will be granted, by way of the taking of an account, and the ordering that any amount so certified be paid to the party entitled, where such a claim is made and substantiated in a proceeding; not a rule intended to provide interlocutory disclosure to a party unconnected with any final relief.
7. It is noted that the only account sought in the statement of claim is that certain defendants account to the plaintiffs for any benefits acquired by them as a result of entry into the 2018 Unitholders Deed (referring to prayer 7 of the statement of claim). The Zhang defendants say that there is no basis for ordering under r 46.2 of the UCPR that the defendants give interlocutory disclosure unconnected with any final relief; and that there is no basis for ordering any account on a final basis before the entitlement to an account is determined at trial.
8. Fourth, as to prayer 13, which seeks discovery or, alternatively, preliminary discovery, the Zhang defendants say that no good reason has been made out to depart from the rule in the Equity Division that discovery will only be ordered following the service of evidence. The Zhang defendants note that the stated reason as to why the plaintiffs seek the 41 categories of documents in the Schedule to the 7 April 2021 letter (namely, to amend their statement of claim to add new allegations) is not a proper reason to depart from the rule mandated by the Practice Note.
9. Nor, it is said, have the plaintiffs made out the preconditions for the favourable exercise of the discretion under r 5.3 of the UCPR to grant preliminary discovery. First, it is noted that no attempt has been made to identify the causes of action which the plaintiffs are considering bringing against the defendants and to explain why the documents sought are needed to decide whether to bring such claims (see r 5.3(1)(a) of the UCPR). Second, it is noted that preliminary discovery is not available where the applicant has already decided to bring the claim (Morton v Nylex Ltd [2007] NSWSC 562 at [33]); and the Zhang defendants say that it appears clear from the evidence that the plaintiffs have already resolved to file an amended claim.

Plaintiffs' submissions in reply

1. As adverted to above, in response to the submissions by the Zhang defendants citing Katzmann J's judgment in Mesa Minerals (at 22), the plaintiffs point to the reference there made to the decision of Young J, as his Honour then was, in Cescastle, where his Honour made an order permitting inspection of company records (proxies), the plaintiffs having sought to see those documents to obtain "an indication as to whether it would be worthwhile requisitioning a meeting or taking some other action as a possibly oppressed minority" (at 117) and said (at 118) that "[a]lthough the purpose in seeking the proxy forms may to a degree be tactical, the tactics are in connection with exercising rights as a shareholder, either by asking the proper questions at the next annual general meeting, or in convening a meeting, or in commencing litigation, rather than in any other way". It is noted that, when referring to another class of documents, his Honour observed that it was "a proper purpose for the shareholders to see the primary documents when prima facie there is an irregularity".
2. The plaintiffs say that, insofar as his Honour distinguished between "a purpose connected with the proper exercise of the rights of a shareholder as a shareholder" and a "purpose connected with some other interest, such as an interest as a bidder under a takeover scheme, or as a litigant in proceedings against the company", his Honour was there distinguishing the case of a party entitled as shareholder to exercise rights and remedies (including by way of litigation) from litigation which is not connected in any way with those rights but is against a company in which, adventitiously, the plaintiff happens to be a shareholder.
3. The plaintiffs point to the recognition in Mesa Minerals that a shareholder may seek records for the purpose of deciding whether to commence, and, if so decided, use such records in, proceedings against the company connected with its rights as shareholder; and to the reference in Mesa Minerals to cases such as Barrack Mines Ltd v Grants Patch Mining Ltd [1988] 1 Qd R 606 (Barrack Mines) (see Mesa Minerals at 22). The plaintiffs say that the present is such a case, where the company's only purpose is to be a trustee and the relation of shareholders was made to coincide with the relation of unitholders in the same percentages. It is noted that in Barrack Mines, it was held to be a proper purpose for a shareholder complaining about a proposed transaction to inspect documents in circumstances where it "needed to form the view that the proposed transactions would not effect substantial loss of value of [its] investment" (at 611), even though it was recognised that the shareholder "may have been casting about and seeking alternatives" (at 615 per Andrews CJ).
4. Reference is also made by the plaintiffs to Re Augold NL [1987] 2 Qd R 297 (at 309), where Williams J accepted that an equivalent statutory provision (s 265B of the Companies (Queensland) Code) would be enlivened where, inter alia, the applicant member was contemplating applying for oppression relief or contemplating derivative proceedings; and said that, while discovery could ordinarily be obtained in oppression proceedings, s 265B liberalised significantly the pre-existing law in that it would enable an application for inspection before such proceedings were commenced and that, in such circumstances, "consistently with the strictures on disclosure" the Court could well order that the information obtained on inspection only be used for the purposes of determining whether or not proceedings should be commenced, and if so in prosecuting them. It is noted that in Unity APA Ltd v Humes Ltd (No 2) [1987] VR 474 (Humes No 2), Beach J cited the above statements with approval and (at 481) allowed the applicant to have inspection where its primary or dominant purpose was to ascertain whether or not the directors have been and are in breach of their duties and whether or not it should oppose the proposal there in question (there drawing a distinction between a decision of a "mere managerial nature" and one that had more significant consequences).
5. The plaintiffs note that in Barrack Mines, the Queensland Full Court endorsed the references in the above cases to a liberalisation of the previous law as being "a reference to its enabling discovery to be obtained before commencing other proceedings without the applicant's having to establish an intention to do so" (at 616).
6. Reference is also made by the plaintiffs to Biala Pty Ltd v Mallina Holdings Ltd [1990] WAR 371 where Rowland J, citing Intercapital Holdings Ltd v MEH Ltd (1988) 13 ACLR 595 (at 601-602), granted access to company records under s 265B of the Code and suggested that the section would be enlivened by circumstances which would lead a reasonable shareholder who takes an interest in the affairs of the company to "wish to know what occurred in relation to this transaction" or to seek "to dispel the doubts of a reasonable inquirer" or to reach the conclusion "that there is a case for investigation".
7. The plaintiffs say that it is also relevant to consider the place of s 247A in relation to the common law rights of a shareholder in relation to access to documents, as discussed in Edman v Ross (1922) 22 SR(NSW) 351 (Edman v Ross) (requiring the member to demonstrate a special interest different from the general run of members) and the rights of shareholders to access to company documents in relation to an internal management dispute (see Re Hydrosan Ltd [1991] BCLC 418) and in relation to access to privileged documents for which the company has paid (see Gray v BNY Trust Company of Australia Ltd (formerly Guardian Trust Australia Ltd) (2009) 76 NSWLR 586; [2009] NSWSC 789). The plaintiffs say that these cases appear to proceed on a quasi-proprietary basis or by analogy to the rights of partners in partnerships and beneficiaries of trusts. The plaintiffs note in this regard that the common law right of inspection was discussed in Barrack Mines (at 613-614) and that Edman v Ross was applied by Windeyer J in Downey v Pryor [1960] HCA 49; (1960) 103 CLR 353 (at 366-367).
8. Finally, the plaintiffs emphasise that VIP Sale has not opposed any aspect of the application; and they complain that the Zhang defendants are in the position of shareholders with privileged access seeking to prevent another shareholder having access.

The Fang defendants' submissions

1. The Fang defendants, in their submissions, emphasise the need to distinguish between the respective defendants and their different roles. Ms Fang points out that, as the sole director and shareholder of her investment vehicle, Ozjian, she has a similar status to Ms Wang (Ms Wang being the sole director and shareholder of her investment vehicle, Haixin); and it is noted that Ms Fang is not an officeholder of VIP Sale or Giant (nor, other than Ozjian, of any other party in this proceeding). (Ms Fang denies that she has a managerial role in relation to VIP Sale, as asserted by the plaintiffs.)
2. In those circumstances, the Fang defendants cavil with the proposition that they owe the plaintiffs duties to answer specific questions or to provide documents at this stage of the proceeding. Indeed, it is suggested that the Fang defendants may in fact be in a similar position to the plaintiffs, being (it is submitted) themselves at an "informational disadvantage" and having themselves invested in the projects on the faith of information provided to them, to their own disadvantage.
3. The Fang defendants note that, in the substantive proceeding (as adverted to above), the plaintiffs' claim against Ms Fang and Ozjian is a claim for misleading or deceptive conduct based on alleged representations to the plaintiffs about the proposed development which it is said they did not have reasonable grounds to make; and failure to disclose certain things to the plaintiffs. As to the former, the Fang defendants say (among other things) that they were a mere conduit for information about the project that had in turn been provided to them by Ms Cai, and did not themselves make any representations. As to the latter, the Fang defendants say (again, among other things) that they had no knowledge of or involvement in certain of the matters about which the plaintiffs complain; that they did not know what the plaintiffs knew or did not know at any particular point in time; and deny that there was any failure to comply with any obligation. The Fang defendants say that (like the plaintiffs) they were merely investors.
4. Complaint is made by the Fang defendants that the plaintiffs' submissions on the present application cover a much wider range of issues than the matters covered in their pleadings; and that the orders sought are not limited to issues of relevance to pleaded matters.
5. The Fang defendants say that the issues relevant to the main proceeding will include: the nature of Ms Fang's role, relationships and communications with the other parties, and the information that she had or did not have at any particular time, or might reasonably have expected other parties to have; and that these are not issues to be resolved in an interlocutory proceeding.
6. Further, the Fang defendants complain that, despite the only correspondence prior to the service of the notice of motion being the letter dated 7 April 2021 requesting answers to various questions, the notice of motion filed on 13 April 2021 seeks a range of other orders against them, none of which had previously been requested or foreshadowed in correspondence.
7. Turning to the particular orders sought against the Fang defendants on the present application, the Fang defendants make the following submissions.

Prayer 15: answers to questions in letter dated 7 April 2021

1. The Fang defendants say that the only request that was made of them, prior to the plaintiffs filing their notice of motion on 13 April 2021, was the letter dated 7 April 2021 from the plaintiffs' solicitors (sent less than a week earlier).
2. It is noted that, among other things, that letter made a range of requests for "explanations" of a range of matters, including: explanations of transactions to and from Ozjian's own bank account, including questions such as "whose money was it" and questions about "the source of those funds"; questions such as why certain things were represented (in circumstances where it has not been pleaded that such a representation was made, or by whom, and in circumstances where the Fang defendants have denied in their defence making any relevant representations); questions such as "why" Ozjian did not do certain things or comply with alleged promises (in circumstances where it has neither been established that there were such promises nor that Ozjian did not comply with them, and where any such obligations (if established) would relate only to its capacity as a unitholder); questions such as "why did your clients prefer to dispose of funds that way", which the Fang defendants say contain implicit, unstated assumptions, and ask about Ozjian's subjective motivations; and questions to which the Fang defendants say they do not have the answers.
3. The Fang defendants say (as did the Zhang defendants) that this relief sought is in the nature of interrogatories and that the plaintiffs have not made any application under Part 22 of the UCPR. It is noted that an order will not be made under Part 22 unless the order is necessary at the time it is made. It is submitted (having regard to the nature of the questions in the plaintiffs' solicitors' letter) that such orders are neither necessary nor appropriate. For example, it is said that Ozjian has no duty to explain transactions on its own bank account; nor does it have any duty to explain what it may or may not have done in its capacity as a unitholder, or why. (Further, in this context it is said that the suggestion that Ozjian's request to return its confidential information, being its own bank statements, was somehow inappropriate fails to take into account the different roles and obligations of the different parties.)

Prayers 10 and 12

1. Prayers 10 and 12 seek orders that Ms Fang do all things necessary (including that Ms Fang provide to those entities all information and documents within her power and knowledge) to cause and enable each of VIP Sale and Giant to comply with the orders that the plaintiffs here seek against those entities for the filing and service of a verified detailed list of the assets, liabilities and transactions of the respective trusts.
2. The Fang defendants say that there is no evidence that any such order against Ms Fang is necessary. In particular, it is said that there is no evidence that: Ms Fang holds any information or documents that the trustees do not, such that her assistance is required in order to enable the trustees to comply with any such order made against them; Ms Fang is capable of causing VIP Sale or Giant to do anything; any request has been made by either VIP Sale or Giant for Ms Fang's assistance; nor that Ms Fang would not comply with any request should it be made.
3. It is noted that Ms Fang has deposed that, while she cannot see how her assistance would be necessary, if it were in fact the case that her assistance was necessary, and VIP Sale or Giant requested her assistance, then she would comply with that request. It is said that there would be nothing for Ms Fang to do in advance of any such request, as she would not otherwise know what was required of her.

Prayer 6

1. Prayer 6 seeks an order that Ms Fang provide to the plaintiffs, or produce to the Court, a copy of all books and records of VIP Sale or Giant (whether or not as trustees of the respective trusts) remaining in her possession or in the possession of any agent of Ms Fang.
2. Again, it is submitted that there is no evidence that Ms Fang holds any books and records of VIP Sale or Giant (as distinct from copies of anything about or relating to VIP Sale or Giant that may have been provided to her at any stage, in her capacity as a unitholder or defendant in these proceedings). It is noted that Ms Fang has deposed that she does not hold such documents. Further, it is said that there is no evidence that Ms Fang would not comply with any request from VIP Sale or Giant to assist them to comply with any orders that might be imposed on them to produce their books and records, should VIP Sale or Giant in fact determine that they needed her assistance to do so.
3. The Fang defendants maintain that there is a fundamental distinction between books and records "of", as opposed to "about, the trustees". It is said that Ms Fang, as the director and shareholder of Ozjian, and a defendant in the litigation, owes the plaintiffs no duties to provide to those plaintiffs copies of whatever documents the Fang defendants may have that are about (or may relate to) VIP Sale or Giant. It is said that this is tantamount to seeking general discovery against Ms Fang (and that such an order is sought without any of the usual limitations as to relevance to the issues in the proceeding).
4. Insofar as prayer 6 specifically refers to the records of Ms Fang's participation in the purchase of land on behalf of Giant and the records of her participation in collecting or remitting any funds for or to either Giant or VIP Sale, the Fang defendants again contend that this ignores the distinction between records of the trust and records about or that relate to the trust.
5. As to the reference to participation in the purchase of the land, the Fang defendants say that there is no evidence that Ms Fang participated in the purchase of any land on behalf of Giant, noting that Ms Fang has deposed that she had no involvement in the purchase by Giant of either of the two Burwood properties in question in these proceedings (being the Burwood Road Site and the Burleigh Street Site). Pausing there, one might well think that if that is the case then there would be nothing to produce and it would be a simple matter to say that. In any event, it is said that, even if Ms Fang had in fact participated in the sale, any obligation that a trustee may have to account or provide information to a beneficiary about a particular transaction, such as the purchase of land, would be limited to the facts about the transaction itself (for example, such as what was done or what was paid). It is said that any such obligation would not extend to matters such as, for example, the extent of involvement or knowledge of any particular individual; and that it would not extend to a direct obligation on the part of any third party, who a beneficiary suspects might have been involved or had some knowledge, to provide information or documents to that beneficiary in order to demonstrate whether or not they did in fact have any involvement or knowledge.
6. The Fang defendants also say that the wording of prayer 6, insofar as it refers to records "of" VIP Sale and Giant and then specifically states that it includes the records of Ms Fang's participation in the purchase of land on behalf of Giant, either indicates an incorrect assumption that any such records held by Ms Fang would in fact be records "of" VIP Sale and/or Giant or contains an implied qualification on the scope of any such "records of her participation" (that qualification being that those records must also in fact be records of the trustees).
7. The Fang defendants say that there is no evidence that there was any irregularity in Giant's acquisition of the two properties and that what the plaintiffs appear to be raising is an issue of internal accounting and transfers of funds, particularly regarding the deposits (relating to where the funds for the deposits came, and how they were subsequently reimbursed or reconciled and accounted for in the trustee's records). The Fang defendants say that those matters go beyond records of the purchase transaction itself; and, in any event, Ms Fang has deposed that she had no involvement in the preparation of any accounts or accounting information for VIP Sale and Giant, and she did not operate or make transactions from the bank accounts of either of those parties. To the extent that the plaintiffs point to the authority that Ms Wang gave Ms Fang to operate on Haixin's bank account under Ms Wang's direction, the Fang defendants say that there is no suggestion that this payment was a payment on behalf of Giant (as purchaser) to the vendor, or that it was indeed anything other than a unitholder contribution to the trust. (That, of course, only serves to highlight the complaint that the plaintiffs make as to the lack of information they have as to the unitholder contributions and payments that were made.)
8. Insofar as there may be a factual dispute as to whether Ms Fang told Ms Wang (and whether Ms Wang agreed) that the amount paid around the time that the deposit for the Burleigh Street Site was due would be paid to Mayland's account, the Fang defendants say that the amount nevertheless appears to have been acknowledged by VIP Sale as a unitholder contribution from Haixin. It is said that no complaint about this matter is raised in the pleading and that this matter was not raised in any prior correspondence. The Fang defendants further say that this was not raised as an issue in the 7 April 2021 letter to the solicitors for the Fang defendants and that the plaintiffs have not asked Ms Fang for any further information or documents in relation to this transaction on Haixin's account. It is said that there is no reason to conclude that Ms Fang would not comply with any such request in relation to that transaction, if asked, and there is no evidence that Ms Fang is withholding any information. Complaint is made that it is not clear what further information the plaintiffs want to know. (In that regard, the fact that this issue was not raised prior to the making of the application may well be relevant to issues such as costs or the like. However, if the position of Ms Fang is that she will provide information if requested, I would have thought an application for orders of the kind here sought should be understood to be such a request - in which case, I would encourage her to make good that submission by responding to the request for information without further delay, in order to minimise ongoing dispute.)
9. As to the reference in prayer 6 to the records of Ms Fang's participation in collecting or remitting any funds for or to either Giant or VIP Sale, the Fang defendants again draw a distinction between an act or transaction "of" a trustee, and a transaction "with" a trustee. The Fang defendants cavil with any suggestion that a person who enters into a transaction with a trustee (for any reason and in capacity), comes under a duty to the beneficiaries of the trust to explain and provide documents about that transaction. It is said that any duty to account or explain is owed by the trustee itself.

Prayer 13: discovery or preliminary discovery

1. As to prayer 13, which seeks an order that the Fang defendants give discovery or preliminary discovery (in the categories specified in the Schedule to the letter dated 7 April 2021 from the plaintiffs' solicitors to the Zhang defendants' solicitors - not, it is noted, to the solicitors for the Fang defendants), a similar response is made by the Fang defendants to that made by the Zhang defendants.
2. As to the application for preliminary discovery, the Fang defendants say that r 5.3 of the UCPR does not apply (as preliminary discovery is being sought from the existing defendants one year into the proceeding, not from prospective defendants prior to the commencement of proceedings). It is noted that the preliminary discovery does not relate to a potential cross-claim against a third party, for the purpose of r 5.3(4); nor it is said, does r 5.4 apply, as preliminary discovery is being sought from the existing defendants, not from persons who are not parties to the proceeding.
3. As to the application for discovery, the Fang defendants emphasise the stage of the proceeding at which this application has been made; noting that no evidence has been served in the proceeding other than on the present motion and that the plaintiffs are still at the pleadings stage. Complaint is made that the documents appear to be sought not for the purposes of progressing the plaintiffs' existing claim, but for the purposes of a broad-ranging fishing exercise, to explore whether the plaintiffs may be able to make further claims against any or all of the existing defendants. It is submitted that the plaintiffs have not pointed to any "exceptional circumstances necessitating disclosure"; have not demonstrated that such an order is necessary for the resolution of the real issues in dispute in the proceeding; have not identified what those real issues are; and that the documents sought go way beyond any issue identified in the current pleadings. Complaint is made that the plaintiffs' submissions contain "a litany of untargeted suspicions, grievances and rhetorical questions, beyond the issues in the pleadings". Finally, it is noted that the Practice Note also requires the plaintiffs' affidavit to address the likely cost of such disclosure and that the plaintiffs have not addressed this requirement. The Fang defendants say that the present application is a disproportionately costly exercise.

Further submissions

1. The Fang defendants also complain that the plaintiffs did not answer the repeated requests made of them by the solicitors for the Fang defendants to explain the basis on which the orders were sought against them; instead, they served thousands of pages of evidence and lengthy submissions (most of which it is said do not relate to the orders sought against the Fang defendants), while at the same time seeking costs against Ozjian and Ms Fang. It is submitted that the plaintiffs have not complied with their obligations under section 56 of the Civil Procedure Act.
2. The Fang defendants maintain that no orders are required against any parties who are not trustees in respect of the orders sought for production by the trustees, arguing that there is no reason to conclude that either of the trustees would not be capable of complying, or would not comply, with any orders that might be made against them. Pausing here, this submission does not seem to take into account the fact that the plaintiffs are seeking documents that may not be in the possession of the trustees, such that co-operation might be required of parties who are not the trustees in order to procure the necessary documents or information.
3. The Fang defendants maintain that the present situation, as it relates to them, is different from that in Iacullo v Murr, on the basis that: both VIP Sale and Giant are still in existence; Ms Fang is not a director or officeholder of either of them; and there is no urgency in obtaining the records. The Fang defendants dispute the suggestion that Ms Fang had any management role and say that there is no evidence that Ms Fang has any trust records under her control.
4. The Fang defendants say that, should the orders sought by the plaintiffs against the trustees be made (and those orders complied with), the plaintiffs would then have access to all trust records (which it is said ought then to be made available to all beneficiaries, including Ozjian). In those circumstances, the Fang defendants argue that the plaintiffs should not be entitled to production of any further documents from any other parties. It is said that the plaintiffs have no entitlement (absent a general order for discovery) to documents that do not relate to the administration of the trusts (but might relate to the parties in their capacities as unitholders); nor to copies of the same documents already provided by the trustee.
5. Finally, the Fang defendants respond to (and cavil with) various of the submissions made by the plaintiffs as to why the Fang defendants are obliged to make disclosure (see at 322-(g) of the plaintiffs' submissions). I do not propose here to address those matters in any detail, save to note that the factual basis for many of the submissions is disputed (and cannot here be determined) and, in relation to many of the submissions, it is contended that even if factually correct they would not give rise to an entitlement to the orders sought.
6. In summary, the Fang defendants: dispute the assertion that they were promoters of the venture (see 322); cavil with the suggestion that Ms Fang had an ongoing role in "fund raising" (at 322), submitting that the reference to "fund raising" is obscure; say that the Fang defendants have no obligation to explain Ms Fang's role in "collecting funds for transfer to Giant or VIP Sale" (see 322), nor does Ozjian have a duty to explain its own transactions; deny that anything "nefarious" has been established about the alleged transactions beyond mere suspicions; deny the suggestion that Ms Fang took part in negotiations and arrangements in relation to the borrowing and mortgage by Giant or as to any discriminatory regime of contributions by unitholders (see 322]; deny that Ms Fang had a management role in the venture (see 322](d)); say that it is not clear to what the plaintiffs are referring when they assert that Ms Fang "took part in activities that determined positions of both VIP Sale and Giant" (see 322); repeat the submissions made above as to the import of Ms Fang having been authorised to draw on Haixin's account, and in particular say that there is no reason to conclude that Ms Fang would not comply with any request for further information or documents in relation to the transaction effected by her on Haixin's account at Ms Wang's direction (see 322); deny that there was any "obvious conflict" in the receipt by Ms Fang in receiving and complying with Ms Cai's directions as to how unitholders contributions were to be paid (and point out that there is no allegation of any such conflict in the pleadings; argue that the plaintiffs' submissions contain an assumption that the other unitholders did not contribute "as agreed" and say that the agreement which established Ozjian's equity in the overall venture (being 18.75% of VIP Sale's 40% interest) was the same agreement which established Haixin's equity stake and was signed before any contributions were made or due; say that the plaintiffs have not pointed to any contractual obligation pursuant to which the unitholders were obliged to use their own funds (rather than borrowed funds) for the purposes of their contributions; and refer to Ms Fang's evidence that the Fang defendants had no involvement in arranging the loan and mortgage and was not aware of their details.
7. In relation to the plaintiffs' submission (at 322) that Ms Fang "was sufficiently closely involved in using her personal association and influence over the plaintiffs in her promotional activities … that she ought be held to have been in a relationship of trust and confidence importing direct fiduciary obligation", the Fang defendants maintain that any allegation of breach of some fiduciary obligation should be pleaded (and that this would then be a matter to be determined in the main proceeding, not in the interlocutory proceeding).
8. In any event, the Fang defendants say that, regardless of the outcome of any particular factual disputes, none of the above suggests that Ms Fang or Ozjian was a trustee; nor does it establish that either of them holds trust records; and that it does not explain why the Fang defendants should be obliged to answer the questions in the plaintiffs' letter of 7 April 2021.

Trust Books and Records Orders - prayers 1-3 of the notice of motion

1. While in some respects this is a straightforward category (at least insofar as it is not here disputed that as a general proposition a beneficiary has a right of access to books and records of the trust), it is complicated in the present case by a number of things: first, the fact that there are two trusts (Haixin only being a unitholder in, and creditor of, one of the two trusts - the Burwood 168 Unit Trust); second, the issue as to what are the books and records of the trust to which there is an entitlement to access (as properly understood); and third, that the orders sought in this category of orders extend to orders against Mr Zhang, the former director of Giant and remaining sole director of VIP Sale.
2. I turn first to the second of those issues - the vexed question of what comprise the books and records of a trust. I say "vexed" because the concept of "documents of the trust" is an issue that was considered in some detail by Brereton J, as his Honour then was, in the Rinehart Trust Documents decision, albeit there in a (relevantly) very different context; his Honour there noting (at [30]) that the expression had not been comprehensively defined but that it included at least documents containing or evidencing the terms of the trust, documents relating to the trust property and the accounts of the trust. In that case, his Honour was dealing with the obligations of an outgoing trustee, not with a claim by a beneficiary or creditor of the trust for access to documents.
3. It is apparent, by reference to the Schedule of documents attached to the letter dated 7 April 2021 from the plaintiffs' solicitors to the solicitors for the Zhang defendants, that the plaintiffs here seek far more than what would ordinarily be regarded as the trust books and records (even on an expanded view of that expression and even leaving aside that they are also seeking an explanation for the state of affairs there recorded, such as why it was that a two-tiered structure was adopted in the first place).
4. For example, the plaintiffs here seek access to the original electronic files in which documents (such as costs agreements) were drawn (apparently seeking metadata to ascertain the time at which documents were created) and records of communications including emails, letters, WeChat messages and text messages between any of various groups of defendants in relation to a wide variety of matters, including the preparation, negotiation, discussion or execution of a number of agreements, or in relation to matters such as the purpose for particular contributions. What the plaintiffs are seeking essentially appears very much to be general discovery; not limited to the constituent documents or accounts of the trusts but going well beyond documents relating to the property or assets of the trusts (and effectively calling for the "purpose" of or an explanation for transactions or to see how the final transactions came about - i.e., how documents were negotiated and created).
5. Insofar as the plaintiffs invoke the definition of "documents of the trust" as explained in the Rinehart Trust Documents decision, it should be recalled that Brereton J observed (at [43]) that a document does not become a "document of the trust" merely because that document was considered or adverted to in the course of making a decision; and that his Honour considered that the notion embraced by "documents of the trust" was that of ownership, as distinct from relevance (or the trustee having had regard to a document).
6. In the Rinehart Trust Documents decision. Brereton J summarised ( at [41]) the obligation of an outgoing trustee to its successor in relation to the production of documents of the trust as being (subject to the court's discretion to mitigate it) "to hand over to an incoming trustee all documents which relate to the administration of the trust so as to enable the incoming trustee to fulfil his duties" (citing, inter alia, Tiger v Barclays Bank Ltd [1952] 1 All ER 85 at 88 per Jenkins LJ), and noting that the rationale for this obligation is that the new trustee is prima facie entitled to be placed in just as good a position as the outgoing trustee in relation to all aspects of the administration of the trust. That rationale cannot apply in the present case, in circumstances where there is no change in the position of trustee and no 'handing over' as such.
7. His Honour found (see at [83]-[84]) that it had wrongly been determined by Mrs Gina Rinehart's solicitors (when they first reviewed and produced documents) that the following classes of documents were not trust documents: (1) Documents disclosing deliberations on the part of the [Gina] in her capacity as [trustee] which did not reflect or refer to a decision taken by her in that capacity; (2) Documents relating to advice obtained by [Gina] in response to allegations or threats made against her by one or more of the beneficiaries or threatened or actual court proceedings against her by them, being documents the subject of legal professional privilege that belongs to her in her capacity as [trustee]; (3) Documents that are confidential in nature, in respect of which in her trustee capacity [Gina] does not hold the confidentiality on behalf of [the beneficiaries]; (4) Personal documents of [Gina] as trustee, including communications with the beneficiaries (whether individually or otherwise), unless including a decision made by her as trustee; and (5) Documents concerning only the affairs of companies and entitles in the HPPL Group other than [HMHTI] or the Trust.
8. His Honour summarised (see at [141]) his conclusions as to the "documents of the Trust" that Mrs Rinehart (the outgoing trustee) was obliged to deliver up to the incoming trustee, as follows: (1) all documents received or held by her or on her behalf exclusively in her trustee capacity (in which the Trust alone has a proprietary interest); (2) all documents received or held by her or on her behalf jointly in her trustee capacity and also in another capacity; (3) all documents received or held by her or on her behalf in her trustee capacity, in which the Trust and another entity or entities also have a proprietary interest, provided that where the original is not in her possession or control a copy must be provided; and (4) all documents received or held by her in some capacity other than as trustee, including as a director of HPPL, which were used in the administration of the Trust.
9. His Honour went on to make clear (at [142]) that: 142. Documents which satisfy those criteria are for relevant purposes (namely, delivery up to an incoming trustee) documents of the Trust, notwithstanding that they are: (1) documents which while disclosing deliberations on the part of [Gina] in her trustee capacity, do not reflect or refer to a decision taken by her in that capacity; (2) documents which record communications of the trustee with some or all of the beneficiaries but do not record a decision made by the trustee; (3) documents that were merely subject of the trustee's consideration in making a decision or administering the trust; (4) documents that are confidential in nature, in respect of which in her trustee capacity [Gina] does not hold the obligation of confidence on behalf of the beneficiaries as a whole (such as private information about a particular beneficiary); (5) documents concerning only the affairs of companies and entitles in the HPPL Group other than [HMHTI] or the Trust; and (6) legal advice and related documents sought or obtained by her in her trustee capacity, whether or not also in some other capacity (other than advice obtained by [Gina] for the sole purpose of responding to allegations or threats made against her by one or more of the beneficiaries or threatened or actual court proceedings against her by them, being documents the subject of legal professional privilege that belongs to her personally and is not held on behalf of the beneficiaries).
10. The concept of "documents of the trust" in this context (which is explicable because of that particular context) thus seems to me to go well beyond the concept of trust documents to which it has been said that, as a general rule, a beneficiary will have a prima facie right to inspect (see Avanes v Marshall (2007) 68 NSWLR 595; [2007] NSWSC 191 per Gzell J at [3], his Honour there referring to Re Cowin (1886) 33 Ch D 179), which was considered by the Hon JC Campbell in the Campbell Article.
11. It is clear in my opinion that the scope of the construction afforded by Brereton J to the expression "documents of the trust" must be understood in the context that this was an outgoing trustee being required to put the incoming trustee into possession of such documents so as to enable the incoming trustee to be fully appraised of the circumstances and history of the trust; rather than the case of a beneficiary seeking to inspect trust documents.
12. I do not consider that the expression "documents of the trust" as explained in the Rinehart Trust Documents decision thus necessarily informs the content of the "books and records of the trust" that could properly be the subject of the orders for access sought in prayers 1-3 of the notice of motion. Moreover, insofar as the relevant Trust Deeds make clear (from their context and otherwise as the Zhang defendants contend) the records of the trusts which beneficiaries have a right to inspect, I consider that there is force to the submission that the right of inspection is limited to those documents.
13. It is not therefore necessary to say much about the reference by the Zhang defendants in this context to Target Holdings. In passing, however, I would note that there would seem to be a divergence in the treatment of principles of equitable compensation in the United Kingdom (Target Holdings and AIB Group (UK) plc v Mark Redler & Co Solicitors [2015] AC 1503 (AIB v Redler) and in this country (see Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484; [2003] HCA 15 and Agricultural Land Management Ltd v Jackson (No 2) (2014) 48 WAR 1; [2014] WASC 102) and that it is by no means clear that the comments in the UK cases as to the differentiation between trading trusts (or bare commercial trusts) and other (more traditional) types of trusts will find favour here. The relevant passage in Target Holdings was the statement by Lord Browne-Wilkinson (at 435) that: … it is in any event wrong to lift wholesale the detailed rules developed in the context of traditional trusts and then seek to apply them to trusts of quite a different kind. In the modern world the trust has become a valuable device in commercial and financial dealings. The fundamental principles of equity apply as much to such trusts as they do to traditional trusts in relation to which those principles were originally formulated. But in my judgment it is important, if the trust is not to be rendered commercially useless, to distinguish between the basic principles of trust law and those specialist rules developed in relation to traditional trusts which are applicable only to such trusts and the rationale of which has no application to trusts of quite a different kind.
14. In AIB v Redler, both Lords Toulson and Reed, with whom the rest of the Supreme Court agreed, adopted a qualitative approach to the analysis of the trust relationship; Lord Toulson expressly affirming the approach taken by Lord Browne-Wilkinson in Target Holdings that, while the fundamental principles of equity apply to all trusts, certain detailed rules applicable to one form of trust (a traditional trust) do not necessarily have to be applied to other forms of trust (a commercial trust) if the rationale does not sensibly apply to the latter (at [33]) (and see Lord Reed at [102]).
15. Lord Toulson addressed the criticism that had been made of the passage by Lord Browne-Wilkinson to the effect that it would be "wrong to lift wholesale the detailed rules developed in the context of traditional trusts" and apply them to a bare trust which was "but one incident of a wider commercial transaction involving agency", saying (at [70]) that: … it is a fact that a commercial trust differs from a typical traditional trust in that it arises out of a contract rather than the transfer of property by way of gift. The contract defines the parameters of the trust. Trusts are now commonly part of the machinery used on many commercial transactions, for example across the spectrum of wholesale financial markets, where they serve a useful bridging role between the parties involved. Commercial trusts may differ widely in their purpose and content, but they have in common that the trustee's duties are likely to be closely defined and may be of limited duration. Lord Browne-Wilkinson did not suggest that the principles of equity differ according to the nature of the trust, but rather that the scope and purpose of the trust may vary, and this may have a bearing on the appropriate relief in the event of breach …. Lord Browne-Wilkinson … identifi[ed] the basic equitable principles. In their application, the terms of the contract may be highly relevant to the question of fact whether there has been a loss applying a "but for" test, that is, by reference to what the solicitors were instructed to do.
16. The basis on which the AIB v Redler decision proceeded was that there was a relevant distinction to be made between bare commercial trusts or those arising as an incident to a commercial transaction (see at [70]). (See also the analysis of the so-called "corporatised trust" by Dr D'Angelo in The trust as a surrogate company: The challenge of insolvency, (2014) 8 Journal of Equity 299.)
17. As a matter of principle, however, the fact that the commercial arrangement may encompass contractual provisions that define the parameters of the trust (see Lord Toulson in AIB v Redler at [70]) does not seem to me to assist in determining the present application for books and records of the trusts (or for an account to be provided by the trustee). It may, as the Zhang defendants appear to suggest, inform the scope of the obligation to provide such disclosure or account (i.e., where the operations of a trading trust would differ from those of a traditional trust) but, in the present case I consider that the application can be determined without further digression into that interesting academic debate.
18. Turning then to the first of the issues referred to above, namely the fact that Haixin is seeking books and records not only of the trust of which it is a beneficiary (the Burwood 168 Unit Trust) but also of a trust of which it is not the beneficiary (the Everspring Develop Group Unit Trust), it is relevant to note that there are two bases on which these orders are here sought (leaving aside the submission that a discovery order would be available in lieu of a general administration order and noting that such an order is sought in relation to both trusts and is listed for hearing towards the end of September this year).
19. The first of those bases is in Haixin's capacity as a beneficiary or creditor of the trust (applicable only to its application for the relief in prayer 2 in relation to VIP Sale, unless it has standing on an extended basis akin to that in McLean v Burns Philp); the alternative is on the basis that a beneficiary can in special circumstances sue in the trustee's name.
20. It is relevant here to note the discussion as to the so-called "proprietary basis" of a trustee's obligation to account (in the sense of making available for inspection copies of trust documents) by the Hon JC Campbell in the Campbell Article (albeit that this was before the Rinehart Trust Documents decision); the author there casting doubt on the proposition that the right of a beneficiary to inspect documents turned on the beneficiary having a proprietary right in the document(s) in question or that the document be a "trust document" (cf Mahoney JA's observations in Hartigan Nominees at 432); and saying (at p 145) that: What the court is doing, when it intervenes in favour of such a potential beneficiary to require information to be provided, is taking the view that diligent performance of the settlor's intention and the office the trustee has undertaken requires that such a potential beneficiary be provided with certain information. It seems to me that when the equity court requires information concerning a trust to be provided to someone who happens to have a proprietary interest in the trust fund, it is proceeding on exactly the same principles. In the case of a person with a proprietary right in some particular trust fund, it may be easier to conclude that carrying out of the settlor's intention and the office the trustee has undertaken would require that person to be provided with particular types of information, but that is a matter about what is involved in performance of that particular trust.
21. The Campbell Article went on to observe that, even in relation to a person with a vested right of property in the trust fund, the circumstance of the particular trust might make it clear that the trustee is obliged not to provide information (citing Hartigan Nominees as an example of this) and concluded that in the context of disclosure of information concerning trusts, the exercise of the relevant discretions must take into account that the task of the court is to require the trustee "faithfully to perform the intention of the settlor and the office in question, and if the trustee has strayed from that course, to make whatever order is appropriate in the circumstances to enable that intention to be effected, and whatever is necessary to carry out that office to be done" ( at p 146); and noting that there could be a discretionary ground on which disclosure could be refused (citing Bryson AJ in McDonald v Ellis [2007] NSWSC 1068).
22. Leaving aside the issue as to the proprietary basis for a right to inspect trust books and records (as to which Brereton J's observations in the Rinehart Trust Documents decision, contrary to those in the Campbell Article, would have precedential status), the issue as to standing that here arises is as to prayer 1 of the prayers for relief.
23. In the present case, it is not disputed that Haixin is only a unitholder of the Burwood 168 Unit Trust (not the Everspring Develop Group Unit Trust) and that the trust of which Haixin is a unitholder is a passive investment vehicle. Whether or not there be a sinister motivation for structuring the venture in this particular way is a matter that may arise to be considered at trial. It is, however, relevant in my view that the interest of Haixin was in the investment vehicle (Burwood 168 Unit Trust), not in the Everspring Develop Group Unit Trust (which is the vehicle through which the development is being carried out).
24. Turning to the third of the issues referred to above, the claim for production of documents by Mr Zhang (in his capacity as director or former director, respectively, of the trustee companies), insofar as it turns on the occurrence of a breach of trust by the corporation (i.e., the invocation of s 197 of the Corporations Act) or some fiduciary obligation owed by Mr Zhang, it seems to me to be premature to make orders for production of documents by Mr Zhang (other than in the context of the ordinary discovery processes of the court) until determination of the allegations of breach of trust and the like.
25. With those observations I turn to the three prayers for relief in this first (Trust Books and Records Orders) category.

Prayer 1 - Application by Haixin for production by Giant

1. Haixin seeks by prayer 1 the production by Giant (the trustee) of books and records of the Everspring Develop Group Unit Trust. For practical purposes this is relatively easy to deal with in circumstances where Giant, which was represented at (but did not take an active role in) the hearing of the present application, does not oppose such production (though neither does it consent thereto).
2. It is also perhaps relevant to note that a trustee may be compelled to perform an act which is his or her duty to perform (Re Burrage; Burningham v Burrage (1890) 62 LT 752 at 753 per Chitty J), and the trustee can be visited with the costs of any proceedings rendered necessary by his or her failure to perform that duty (Re Chapman; Freeman v Parker (1894) 72 LT 66; 11 TLR 177).
3. The reason I see this category as relatively easy to deal with is that there is no doubt that the unitholders of the Everspring Develop Group Unit Trust are entitled under the Trust Deed for that trust (as was Haixin in relation to the similar application in relation to the Burwood 168 Unit Trust) to inspect the books and records of the trust. Hence VIP Sale would be entitled to access those documents.
4. I accept that Haixin is in the position one step removed and that, for Haixin to obtain access to those documents from Giant (other than pursuant to various of the other avenues for relief here sought), it would need to be in a position either to compel VIP Sale to exercise its right as unitholder to have access vis a vis Giant (the trustee of the Everspring Develop Group Unit Trust) to those documents (and then to make those documents, in VIP Sale's hands, available to Haixin as a unitholder of that the Burwood 168 Unit Trust); or to conclude (which is more problematic for the reasons adverted to by the Zhang defendants) that there was standing by analogy with the discussion in McLean v Burns Philp.
5. Nevertheless, in circumstances where it appears to be conceded that trust books and records relevant to the issues in the proceeding will ultimately be likely to be discoverable (and where Giant does not oppose such access), it seems to me to be consistent with the just, quick and cheap resolution of the real issues in dispute in this proceeding to make the order sought by prayer 1, limited to such books and records as are in Giant's possession (though, for the reasons that I will explain, I do not propose to make the consequential orders sought as to assistance by the individual defendants in that regard).
6. It should, however, be noted that the order I propose to make will be for inspection of or access to the books and records of the Everspring Develop Group Unit Trust (not production as such, which would presumably involve Giant incurring the expense of photocopying the relevant documents) and will be limited to what I might call the traditional category of books and records of the trust (the constituent documents - not drafts or electronic records of their creation or execution; books of account, such as financial statements and the like; minutes or meetings or resolutions of the trustee company; and records of transactions comprising trust property), not the extended category of documents sought in the Schedule to the 7 April 2021 letter.

Prayer 2 - Application by Haxin (as unitholder) for production by VIP Sale

1. By prayer 2, Haixin seeks the production by VIP Sale of the books and records of the Burwood Unit Trust. This is probably the easiest of the categories here to be addressed. There is no dispute that Haixin is a beneficiary of the Burwood 168 Unit Trust and entitled, both under the Trust Deed (cl 69) and the Management Agreement (cl 13.1), to access certain documents of the trust (though, as the Zhang defendants have pointed out, what Haixin is expressly not entitled to under the Trust Deed (cl 62) is an explanation or reasons for decisions made by the trustee (VIP Sale).
2. The practical issue that here arises is that the Zhang defendants say that all those documents have been provided to Haixin already, which would make such an order otiose. While the plaintiffs cavil with the proposition that they have already been provided with the relevant documents, much of their complaint, properly understood, seems to be directed to the completeness or accuracy of the records, which is a different issue (and one that can be tested in due course at the hearing or by reference to whatever documents are ultimately produced on discovery).
3. On the present application, I am not prepared to go behind (nor am I able to test) the assertion made in correspondence (which I accept was not on oath by Mr Zhang - a matter of which the plaintiffs complain) that all the books and records (strictly understood) of the trust have been produced by VIP Sale already. Certainly, the itemisation of the documents that have been produced (as set out in the correspondence referred to above) seems to me to encompass the kinds of documents to which Haixin as unitholder would be entitled to have access. I see no utility in making an order for production of documents that the party subject to the order has already provided.
4. I therefore will not make the order sought by prayer 2. If it transpires later that VIP Sale is in possession of trust books and records documents that have not been produced to the plaintiffs (a position that would falsify the basis on which I am now refusing that relief) then the plaintiffs may well seek consequential relief as a result, but that is not an issue for today.

Prayer 3 - Application by Haixin for production by Mr Zhang

1. As to prayer 3, this seeks production by Mr Zhang (as previously noted, a director of VIP Sale and a former director of Giant) of all books and records of both the Everspring Develop Group Unit Trust and Burwood 168 Unit Trust in his possession. As to the latter, I have accepted that such documents have already been provided to the plaintiffs (it being the Zhang defendants' position that no point has been taken as to in whose possession - be it VIP Sale, Mr Zhang or Ms Cai - those documents repose). As to the former, I accept that if Mr Zhang (as former director) retained possession of books and records of the Everspring Develop Group Unit Trust then Giant may be in a position to compel him to produce those documents to it (and then would be amenable to an application by a unitholder of that trust for access to or inspection of those documents).
2. I have already indicated that I do not consider it appropriate at this stage of the proceeding to make such an order pursuant to s 197 of the Corporations Act (assuming for present purposes that it extends to liabilities beyond those of a merely monetary nature).
3. I have considered the potential application of a Sabre order, in the context of applications dependent on the party being required to produce documents in possession of its agent. As noted by Le Miere J in Rafferty v Amaca Pty Ltd (formerly James Hardie & Co Pty Ltd) [2017] WASC 18, a Sabre order refers to an order of the sort made in Sabre Corporation Pty Ltd v Russ Kalvin's Haircare Co (1993) 46 FCR 428 (Sabre), being essentially an order made for the discovering party to make reasonable efforts to procure the documents from an associated body that holds them and an ancillary order to discover documents received if the outcome of the first order is a success. His Honour continued (at [62]) to observe that such orders have been made by this Court in the exercise of the powers under s 61(1) of the Civil Procedure Act to give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings (his Honour there referring to Ali v Khan [2015] NSWSC 1961).
4. As to the circumstances in which a Sabre order would be appropriate, in SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd (No 2) (2006) 155 FCR 150; [2006] FCA 931, Edmonds J (in obiter, at [31]-[32]) said that, first, there must be a real likelihood (established by the evidence) that the party who is to take steps to obtain access to and discover the documents which are in the possession, power or control of a third party, would be given access to the documents upon request (referring to Sabre at 432-433); and, second that there must be a likelihood that the documents sought are in fact in existence in the possession of the third party. Relevantly, I note that his Honour added that such an order should be considered "if at all" only after inter partes discovery had taken place, based on appropriate evidence as to the likelihood of existence and provision of documents, and by reference to far more targeted and specific requests for documents, consistent with the authorities on such orders (see at [34]).
5. Giles J, as his Honour then was, in Aetna Pacific Securities Ltd v Hongkong Bank of Australia Ltd (unreported, 29 April 1993) added the further consideration as to whether or not the documents are necessary for disposing fairly of the proceedings.
6. At the present stage of the proceeding, I do not consider it appropriate to make an order that would in effect require Mr Zhang to give discovery of documents in his possession relating to the two trusts in question. In that regard, I proceed on the basis that Mr Zhang has produced (for the purposes of the production by VIP Sale) the books and records of the trust of which VIP Sale is trustee (to the extent that they are in his possession) and in circumstances where I am proposing to make the order sought by prayer 1. I consider that it would be reasonable to expect that the current director of Giant would have taken steps to ensure that Giant was in possession of the books and records of the trust (not least so as to be in a position to satisfy the trustee's obligations in that regard). I therefore will not make the order sought by prayer 3.

Application in circumstances where general administration order would lie

1. Insofar as the application for access to books and records of the trust (and this applies to other relief such as the accounting that is sought on the same basis) is put in the context of the application by the plaintiffs (not yet heard) for a general administration order in respect of both trusts, it is relevant here to consider in some detail the decision in McLean v Burns Philp. Apart from the emphasis placed on this decision in the plaintiffs' submissions, it seems to me that is where the force of the plaintiffs' application for disclosure or an account of the trusts to be provided here lies.
2. The first thing to note is the rather draconian nature of a general administration order in that the effect of an order for general administration was there recognised as being to bring to a halt the whole administration of the trust until leave is given for the trust to proceed (see at 633C) (his Honour there referring to Minors v Battison (1876) 1 App Cas 428 at 438-439 and Re Furness (Viscount) [1943] Ch 415 at 418-419). That is of no little significance in circumstances where, here, one of the trusts concerned is midway through a significant construction project.
3. In McLean v Burns Philp, Young J considered the historical genesis of the administration decree (and noted its liability to abuse) (see at 634) and the streamlining of the procedure during the 19th century, before noting the position in the mid-1980s (by reference to the 13th edition of Underhill's Law relating to trusts and trustees, LexisNexis Butterworths, 1979 at 699) as being that a general administration order would only be made in three categories of case: where the trustees "cannot pull together"; where the circumstances of the trust give rise to recurring difficulties requiring the frequent direction of the court; or where a prima facie doubt is thrown on the bona fides or the discretion of one or more of the trustees. Pausing here, it could only be the third situation that is potentially here applicable since there is in each trust only one trustee and there is no suggestion of recurrent applications for directions having been made to the Court in relation to either trust.
4. It was noted by his Honour that in the second and third categories a "relatively benign view" was taken and the court may act on relatively weak evidence, explaining that this was "because if the plaintiff himself puts forward a case which seems to require the court's investigation, and it turns out not to be a proper case, the court will visit on the plaintiff the costs of the proceedings". His Honour observed that the heavy potential burden of costs seemed to have been the prime weapon for controlling administration suits and keeping them within bounds (referring to Fane v Fane (1879) 13 Ch D 228 in this context).
5. His Honour noted that the reforms made in the 19th century meant that there were a series of quite relatively simple procedures which a beneficiary could take to protect the beneficiary's rights in the trust fund, including the right (with certain exceptions) to see trust documents (and there referring to the decision in Londonderry) (at 635E-F), his Honour then going on to make the comment already referred to above as to it being wrong to compartmentalise the rights of beneficiaries under the law of trusts.
6. Having noted the absence of cases in which a general administration order has been made or sought since the Supreme Court Act 1970 (NSW) came into force, Young J set out (at 636) the two factors governing the exercise of the court's discretion whether to make an administration decree "in cases where a specific order is not appropriate" those being: … First, the court does not make such an order if the only possible result would be that the whole trust fund would be spent in costs or where there would not be likely to be any benefit to the beneficiaries: see Re Customs and Excise Officers' Mutual Guarantee Fund; Robson v Attorney-General [1917] 2 Ch 18 at 26-27 and Meredith v Davis (1933) 33 SR (NSW) 334; 50 WN 127. Secondly, where the trustee has been given a discretion by the trust instrument, he should be permitted to exercise that discretion and the court will not usually exercise it for him: see eg Tempest v Camoys (Lord) (1882) 21 Ch D 571.
7. His Honour went on to say: A beneficiary, if he complains to the court about the administration of a trust is, as a matter of course, entitled to the appropriate order, either to answer his question as to the construction of a trust instrument, or to settle a dispute as to the administration of the trust in whole or in part under the authority of the court, unless the court is satisfied that there is no question which requires its decision. Suspicion of irregularities on very scanty material with respect to mal-administration may be sufficient because the sanction is if, on the court's further inquiry, its initial order is made wrongly, then it will be discharged and the plaintiff must pay the costs of the inquiry. A fortiori, if the affairs of the trust are in great confusion or there have been significant breaches of trust.
8. Halsbury's Laws of Australia (vol 430, at [5205]) states, further to Young J's comments, that the Court will not make a general administration order where: the questions could be determined upon the exercise of the trustee's right to seek the advice and directions of the Court; the questions involve issues of construction of the trust document which may be determined on an originating summons in the equitable jurisdiction of the Court of the jurisdiction concerned; or where the proceedings for obtaining administration are otherwise vexatiously or unnecessarily instituted.
9. Relevantly, in McLean v Burns Philp, which (as is the case here) came before the Court on an interlocutory basis, Young J said that he knew of no case where a general administration order had been made in interlocutory proceedings but his Honour was nevertheless of the view that, if matters of maladministration were brought to the attention of the Court "and the Court can see that immediate action is needed to give relief", the appropriate administration order would be made even without the opportunity of the court having the full facts, knowing that the order could later be stayed or discharged in whole or in part.
10. As to the application for a general administration order in relation to the head trust (of which the plaintiff was not a beneficiary), his Honour considered the plaintiff's standing to be questionable but said that it was inconceivable that a plaintiff who was a creditor would not be heard on an application where a matter of maladministration or fraud was brought to the attention of the Court (see at 637D-E) and went on to say that "[a] fortiori, where there is a trust with no beneficiary or there is a trust whose sole beneficiary itself holds its interest on trust or pursuant to fiduciary obligations, equity would permit those for whom the beneficiary holds its interest, or creditors, to approach it for relief"; and accordingly that the plaintiff had standing to seek administration of both trusts in that case. (As I understand it, and as adverted to above, the plaintiffs here invoke this reasoning to argue that Haixin would have standing to seek orders in relation to the Everspring Develop Group Unit Trust.)
11. His Honour concluded, however, that a general administration order should not be made, at least at the interlocutory stage of the proceeding (see at 643). In that regard, his Honour referred to the transactions about which the plaintiff had complained (the plaintiff there, acting in a representative capacity, harboured suspicions as to what were said to be unusual circumstances of sale of a particular property giving rise to a loss of some $3.35 million in what was said by the plaintiff to be a "gamble [by the trustee] on trying to rescue the situation"); and his Honour referred to the submission for the trustee that it had done what was "perfectly proper" to do its best to salvage a bankrupt trust it had inherited and to minimise loss to the unitholders (and that the sale was a matter for the discretion of the trustee and if it were later found that the trustee was acting improperly then the beneficiaries could claim compensation against the trustee). His Honour was of the opinion that there was no personal liability on the part of the unitholders of the downstream trust (the No 11 Trust) and accordingly that anything the trustee might have done which would have increased the debts of that trust could not be said to be a matter which affected them. His Honour also had regard to the submissions made as to hardship that would be occasioned to the first and subsequent mortgagee (and to third parties) as a result of any general administration order that might be made.
12. His Honour concluded that, even if a sufficiently arguable case for interlocutory relief had been made out, the balance of convenience would clearly favour no relief being granted by way of a general administration order (at 643).
13. It was in this context that his Honour turned to the question of discovery (which otherwise would have been subsumed in the general discovery order); noting that the discovery there being sought was not one dealt with in the then applicable Supreme Court rules but an application for a bill of discovery or under the court's inherent jurisdiction. His Honour considered the procedure in the Court of Chancery in England prior to the Court of Chancery Procedure Act 1852 (UK) and Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133, on which the plaintiff had relied (see from 643-645), before concluding that the Norwich principle was of limited value in New South Wales. His Honour did, however, note that even if the principle were as wide as the plaintiff contended it would not necessarily enable the plaintiff there to succeed; noting that there was no special relationship between the defendants to the unit holders over and above that of mere witnesses and that to order discovery (because the defendants were accused of breach of contractual and fiduciary duty) would be tantamount to an order against a wrongdoer to confess. Further, his Honour noted that the plaintiff had "already collected a whole host of documents and information by the mere fact of taking these proceedings" and would be entitled to discovery under the Supreme Court rules in due course.
14. Turning then to the broader aspects of the application for disclosure by the trustees, the plaintiffs emphasise what was analysed in respect of the obligation of a trustee to account in the Campbell Article to which I have referred above - relevantly, that the duty to account extends beyond the production of documents but also to the provision of information (not necessarily information already recorded in writing) to beneficiaries about the trust and its activities (subject to any limitation in the constituent documents of the trust or the settlor's intention).
15. Reference was made in the comprehensive Campbell Article (to the scholarship of which I am here indebted) to a number of 19th century cases in which an accounting was sought from a trustee (Clarke v Earl of Ormonde (1821) Jac 108; (1821) 37 ER 791 (Ormonde); Budgen v Tylee (1856) 21 Beav 544; 52 ER 970 (Bugden); Wynne v Humberston (1858) 27 Beav 421; 54 ER 165 (Wynne); Talbot v Marshfield (1865) 2 Drew & Sm 549; 19 LT 223 (Talbot); Smith v Barnes (1865) LR 1 Eq 65 (Barnes) as to the standing of the applicant to make such an application. Relevantly, as the author there elaborates, the kind of accounting there considered was, for example, in Ormonde, where land was vested in the trustees in trust for the life tenant and the application was brought by the life tenant and some of the remaindermen, said to be prima facie a right to ask the value of the estates, the amount of money raised by sales and from the rents, and of the incumbrances paid, and of those remaining unpaid. In Bugden, the application was for production of the original trust deed. In Wynne, the statement was made by Romily MR that where the relation of trustee and cestui que trust was established, all "cases submitted and opinions taken by the trustee to guide himself in the administration of his trust, and not for the purpose of his own defence in any litigation against himself, must be produced to the cestui que trust" (they having been taken "for the purpose of administration of the trust, and for the benefit of the person is entitled to the trust estate, who will have paid the expense thereby incurred") (though there, the necessary relationship was not made out). In Talbot, the issue again was in relation to any case for opinion and counsel's advice (there as to whether the trustees should exercise the power to advance). And in Barnes the account sought was of the proceeds of the holding of trust property (deeds by which trust property was purchased and the contract leading up to it, being dealings with the trust estate).
16. Reference was also made to Australian authority in the 20th century - namely, Randall v Lubrano (unreported, 31 October 1975, NSWSC per Holland J, relating to information as to the amount of the trust property and its investments including accounts of the trusts), Spellson v George (1987) 11 NSWLR 300 per Powell J (Spellson v George); Spellson v Janango Pty Ltd (unreported, 8 December 1987, NSWSC per Hodgson J, as his Honour then was (Janango). In Janango, Hodgson J spoke of the right of a beneficiary "for the purpose of investigating possible breaches of that trust, obtaining advice in relation to them and bringing proceedings pursuant thereto" and said that "a beneficiary has a right to know what the trust property is and how it has been and is being administered by the trustee, which is not conditioned on any purpose to investigate breaches of trust and to enforce the trust against the trustee".
17. The Hon JC Campbell (from p 108ff of the Campbell Article) explored further the extent of information required to be disclosed, noting that the right to be provided with information concerning the trust was not merely a right to be provided with statements of facts concerning the trust assets and dealings, but extended to "a degree of proof that the information that has been given is correct" (such as documentary proof of the individual transactions summarised in the accounts); reference being made to In Re Tillott [1892] 1 Ch 86 (at 88-89) where an order was made for the trustee to sign an authority to permit the plaintiff to make proper application to the bank to verify certain matters. (Perhaps in not dissimilar fashion, one might refer to the requirement in the Rinehard Trust Documents decision for an affidavit by the outgoing trustee verifying disclosure.)
18. There is force in the complaint by the Zhang defendants that what is here sought is extensive discovery orders seeking production of documents and information in circumstances where there is dispute as to the underlying facts (and where it is not established at this stage that a general administration order would be made). There is, equally, force in the response by the plaintiffs that it is a circular argument to suggest that the plaintiffs must establish a basis for a general administration order before they can obtain disclosure orders that would (or might) obviate the need for a general administration order.
19. In the present case, where much of the conduct giving rise to the complaint of misconduct by the trustees is the subject of dispute in the proceeding, and where to refuse the relief now sought will not necessarily preclude the plaintiffs obtaining the documents they seek (given the scope for discovery orders to be made in the ordinary course), I have concluded that it is not appropriate at this stage to grant the relief sought by way of invocation of the remedies available in lieu of a general administration suit. (The position may well change, of course, once the application for a general administration order is heard. It is at that time that I think it would be more appropriate to consider the making of disclosure orders of the more extensive kind that are here sought).

Application based on standing pursuant to Ramage v Waclaw

1. Insofar as the plaintiffs maintain that Haixin has standing to seek the relief here sought in effect on the basis that the trustee (VIP Sale) has not done so and will not do so (see Ramage v Waclaw; El-Sayed v El Hawach (2015) 88 NSWLR 214; [2015] NSWCA 26 at [55]-[57] per Beazley P, as Her Excellency then was, Gleeson and Leeming JJA; and TAL Life Ltd v Shuetrim; MetLife Insurance Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 at [54] per Leeming JA (with whom Beazley P and Emmett AJA agreed), it is relevant to note that a beneficiary will be allowed to sue in the name of the trustee only in "special circumstances".
2. In this context, I note that James LJ in Sharpe v San Paulo Railway Co (1873) LR 8 Ch App 597 at [609-610] said that: Is it to be permitted that every one of the persons who has an interest in a thing assigned to a trustee for the benefit of a great number of persons should file a distinct bill in a distinct branch of this Court against the debtors to the estate? I had lately occasion to consider that question, and I came to the conclusion, very clearly, that a person interested in an estate or a trust fund could not sue a debtor to that trust fund, or sue for that trust fund, merely on the allegation that the trustee would not sue; but if there was any difficulty of that kind, if the trustee would not take the proper steps to enforce the claim, the remedy of the cestui que trust was to file his bill against the trustee for the execution of the trust, or for the realisation of the trust fund, and then to obtain the proper order for using the trustee's name, who would on behalf of the whole estate, institute the proper action, or the proper suit in this court. That view I still adhere to, and I say it would be monstrous to hold that wherever there is a fund payable to trustees for the purpose of distribution amongst a great number of persons, every one of those persons could file a separate bill in equity, merely on the allegation that the trustees would not sue (my emphasis)
3. In Hayim v Citibank NA [1987] AC 730 (at [748]) special circumstances in this context were said to embrace "a failure, excusable or inexcusable, by the trustees in the performance of the duty owed by the trustees to the beneficiary to protect the trust property or to protect the interests of the beneficiary in the trust estate".
4. In Ramage v Waclaw at [93], Powell J quoted with approval an explanation of "special circumstances" for these purposes, in Hilliard v Eiffe (1874) LR 7 HL 39 at [44]: ... The rule [that it was the executor and not a legatee or creditor of the estate that was the proper plaintiff] now appears to be, subject to the exceptions of cases of collusion, of insolvency of the personal representatives, of refusal by them to sue, whether collusively or bona fide, or of the existence of what has been rather vaguely termed 'special circumstances'. The last exception seems to comprehend, and to be confined to, cases in which, from the nature of the assets or the position of the personal representative, it would be either impossible, or, at least, seriously inconvenient, for the representatives to take proceedings. In the present case, I am of opinion that, after what has occurred, there would be very great difficulty in the way of the executor with respect to, at least, that portion of the bill which seeks repayment of the moneys already paid, and that his conduct, though not amounting to an actual refusal, affords evidence of an unwillingness to embark in so serious a litigation, sufficiently to justify the Plaintiff in filing his bill against him and the other Defendants.
5. Insofar as the application is predicated on an unwillingness or refusal of the trustee (VIP Sale) to embark on an application for disclosure or account of the kind here sought by Haixin from Giant, what is relevant here to consider is the timing of the application. In circumstances where what is sought is largely discovery that should be able to be obtained in the ordinary course of the proceeding, I do not consider that special circumstances of the kind contemplated in Ramage v Waclaw and the above cases were here established. In any event, I have addressed the claims for books and records above.

Corporations Act Order

1. The second of the orders sought (see prayer 4) is an order requiring Mr Zhang and VIP Sale, pursuant to ss 247A or 233 of the Corporations Act, to provide all books and records of VIP Sale to the plaintiffs' solicitor or the Court. It was conceded in submissions for the plaintiffs that this is, in effect, a back-up order to pick up any documents of the company (VIP Sale) not otherwise falling within the ambit of documents of the trust.
2. I can dispose fairly readily with the claim for relief pursuant to s 233 of the Corporations Act. The power to grant that relief is conditioned on a finding of oppressive conduct which cannot (and should not) be made in advance of a contested hearing. I accept that the plaintiffs have raised a number of complaints which, if established, might point to the affairs of VIP Sale being conducted in a manner unfairly prejudicial or discriminatory to Haixin, so as to ground a finding of oppression. However, such a finding must await a final hearing.
3. As to the claim based on s 247A of the Corporations Act, I note that an application under s 247A must be brought in good faith and for a proper purpose. What is said to be necessary is that the applicant demonstrate a case for investigation, or that the issue raised by the applicant is substantive and not fanciful, as follows.
4. Section 247A of the Corporations Act 2001 (Cth) provides: (1) On application by a member of a company or registered scheme, the Court may make an order: (a) authorising the applicant to inspect books of the company or scheme; or (b) authorising another person (whether a member or not) to inspect books of the company or scheme on the applicant's behalf. The Court may only make the order if it is satisfied that the applicant is acting in good faith and that the inspection is to be made for a proper purpose. (2) A person authorised to inspect books may make copies of the books unless the Court orders otherwise. (3) A person who: (a) is granted leave under section 237; or (b) applies for leave under that section; or (c) is eligible to apply for leave under that section; may apply to the Court for an order under this section. (4) On application, the Court may make an order authorising: (a) the applicant to inspect books of the company; or (b) another person to inspect books of the company on the applicant's behalf. (5) The Court may make the order only if it is satisfied that: (a) the applicant is acting in good faith; and (b) the inspection is to be made for a purpose connected with: (i) applying for leave under section 237; or (ii) bringing or intervening in proceedings with leave under that section. (6) A person authorised to inspect books may make copies of the books unless the Court orders otherwise.
5. As noted in Mesa Minerals (at [19]) by Katzmann J, "books" are defined very broadly in s 9 of the Corporations Act to include a register, any other record of information, financial reports or records, and a document.
6. For the purposes of an application under s 247A of the Corporations Act, it is necessary that the court be satisfied that the applicant is acting in good faith and that the inspection is to be made for a proper purpose. The concept of "good faith and proper purpose" is a composite concept; its existence is to be determined objectively; and the applicant bears the onus in that regard (see Mesa Minerals at [22(4)] per Katzmann J, with whom Siopis and Gilmour JJ agreed).
7. In Mesa Minerals, it was recognised that pursuing a reasonable suspicion of breach of duty is a proper purpose and that it is not necessary to establish that a breach of duty has occurred. What is said to be necessary is that the applicant demonstrate "'a case for investigation'" (Praetorin Pty Ltd v TZ Ltd [2009] NSWSC 1237; 76 ACSR 236 at [38]-[39] per Barrett J, as his Honour then was) or that the issue raised by the applicant is "substantive and not fanciful" (In the matter of Style Ltd, Merim Pty Ltd v Style Ltd [2009] FCA 314; 255 ALR 63 at [66]-[67] per Goldberg J).
8. The strength of the case for investigation is relevant to the issue of discretion on the grant of relief under s 247A, that discretion not being circumscribed. The discretion is one that is apt to be informed by the Court's assessment of the entirety of the evidence and submissions at a final hearing (see In the matter of Combined Projects (Arncliffe) Pty Ltd [2018] NSWSC 649 at [23] per Leeming JA).
9. It is useful here to set out in full the statement by Katzmann J in Mesa Minerals as to the relevant principles in an application under s 247A of the Corporations Act (at [22]): (1) The stipulation that an application be made in good faith and for a proper purpose is a composite notion rather than two distinct requirements: Knightswood Nominees Pty Ltd v Sherwin Pastoral Company Ltd (1989) 7 ACLC 536 at 540-1 (Knightswood). That is to say, as Brooking J put it in Knightswood at 541: [T]he reference to good faith colours and so reinforces the requirement of proper purpose. Acting in good faith and inspecting for a proper purpose means acting and inspecting for a bona fide proper purpose. It is as if the case was one of hendiadys. (2) Good faith and proper purpose must be proved objectively: Acehill, citing Barrack Mines Ltd v Grants Patch Mining Ltd [1988] 1 Qd R 606 (Barrack Mines Appeal) (Full Court) and Knightswood supra. See also the discussion in C Mantziaris, "The member's right to inspect the company books: Corporations Act, s 247A" (2009) 83 ALJ 621 at 628-9. (3) "Proper purpose" means a purpose connected with the proper exercise of the rights of a shareholder as shareholder and not, for example, as a litigant in proceedings against the company or as a bidder under a takeover scheme: Cescastle Pty Ltd v Renak Holdings Ltd (1991) 6 ACSR 115 at 118; 9 ACLC 1333 at 1335 (Cescastle). (4) The onus of proof is on the applicant: Quinlan v Vital Technology Australia Ltd (1987) 5 ACLC 389 at 393 (Quinlan). (5) An applicant who has a significant holding and who has been a shareholder for "some considerable time" will more easily discharge the onus than one who has recently acquired a token holding: Quinlan at 393. (6) It is not necessary that the applicant show that its interests are different to those of other shareholders: Yara Australia Pty Ltd (ACN 076 301 221) v Burrup Holdings Ltd (ACN 097 138 353) (2010) 80 ACSR 641 ; [2010] FCA 1273 at [116]. (7) Nor is it necessary that the applicant have sufficient evidence to bring or make out an action (Praetorin Pty Ltd v TZ Ltd (2009) 76 ACSR 236 ; [2009] NSWSC 1237 at [40] (Praetorin)); it is enough that the issue raised by the applicant is "substantive and not fanciful", not "artificial, specious or contrived": Re Style Ltd; Merim Pty Ltd (ACN 004 986 181) v Style Ltd (ACN 009 248 720) (2009) 255 ALR 63 ; [2009] FCA 314 at [66]-[67] (Re Style). (8) Pursuing a reasonable suspicion of breach of duty is a proper purpose: McNeill v Hearing & Balance Centre Pty Ltd [2007] NSWSC 942 at [17] (McNeill) citing Barrack Mines Ltd v Grants Patch Mining Ltd (1987) 6 ACLC 97 and the judgment on the unsuccessful appeal: supra. (9) Provided that the applicant's primary or dominant purpose is a proper one, it is not to the point that an inspection might benefit the applicant for some other purpose: Unity APA Ltd v Humes Ltd (No 2) [1987] VR 474 at 480 ; Barrack Mines Appeal at 615; Cescastle at ACSR 118; ACLC 1335. (10) Applicants do not necessarily lack a proper purpose merely because they are hostile to other directors: Humes at 480. (11) Neither the fact that an applicant may have had sufficient information earlier nor the fact that an applicant may have other means of obtaining the information is detrimental to an application under the section: McNeill at [23]-[25]. (12) The procedure under s 247A is not intended to be as wide-ranging as discovery so that the general rule is that inspection will be limited to such documents as evidence the results of board decisions, rather than all board papers leading to decisions, but there may be occasions when it is proper to permit inspection of board papers: Acehill at [31]. (13) The Court has a residual discretion whether to order inspection: Humes at 481.
10. The application to have access to the books and records of VIP Sale is here made by a member of the company (Haixin) and I am satisfied that it is made for a proper purpose (namely, for the purpose of Haixin satisfying itself as to aspects of the relevant transactions about which there is concern, in order to finalise (to the extent possible) the pleaded claim at this stage of the proceeding). I do note, however, that Katzmann J included in the summary of principles (at 22) that the procedure under s 247A is not intended to be as wide-ranging as discovery and examples were there given of the limitation that might be made.
11. In circumstances where the Zhang defendants have made clear their position that discovery of documents relevant to issues in the proceeding will be available to the plaintiffs, where the books and records of the trust have already been provided to the plaintiffs (and where I am concerned that the breadth of the documents and information sought on the present application gives rise to the spectre that it will subvert the limitations on discovery contained in the Practice Note), I consider that the appropriate course is to exercise the residual discretion not to order inspection of the broad range of documents here sought by prayer 4. I note, for example, that the general rule in Mesa Minerals is that inspection will be limited to such documents as evidence the results of board decisions, rather than all documents that may be considered or used for decision making purposes (such as board papers leading to decisions). I will however give the plaintiffs liberty to identify any particular corporate books and records of VIP Sale to which they seek access pursuant to s 247A of the Corporations Act (and of which they have not already been provided with copies) and, if there is dispute as to the production of those corporate records (and it is a confined list) I will entertain an application for those documents. Otherwise, it seems to me that the plaintiffs should await the process of discovery in the ordinary course.

Directors/Officers Orders

1. Prayers 5 and 6 seek orders requiring Ms Cai and Ms Fang, respectively, to provide to the plaintiffs' solicitor or the Court all books and records of Giant and VIP Sale (whether or not held by those entities as trustees of the Everspring Develop Group Unit Trust and Burwood 168 Unit Trust, respectively) in their possession.
2. As outlined earlier, the plaintiffs seek these orders on the basis that they have standing to enforce disclosure of officers, agents and other persons who owe obligations of confidence to VIP Sale (as trustee of the Burwood 168 Unit Trust) or who have control of trust records or information. However, the orders sought seem to go beyond this (insofar as they seem to seek books and records of Giant or VIP Sale whether or not in their capacities as trustee). Moreover, there appears to be a dispute as to the role played at least by Ms Fang in the respective companies (if not also as to Ms Cai).
3. I do not consider these orders to be appropriate, particularly in the case of Ms Fang who disputes that she was involved in the management of the relevant companies. (Insofar as Ms Fang has emphasised that, if requested to assist by the relevant entities, she will do so and the relevant entities have either produced the books and records - in the case of VIP Sale; or will now be producing those records - in the case of Giant; unless there are books and records in her possession, which she denies, that will not already be produced, such an order would not seem to have any utility.)
4. I consider that allegations of breach of fiduciary duty, and attempts to enforce obligations of disclosure that the plaintiffs contend are imposed on one or more of the defendants, should await the final trial.
5. Therefore, I will not make the orders sought in prayers 5 and 6.

Transaction List Orders

1. Prayers 9 and 10, in relation to VIP Sale and each of Ms Cai, Ms Fang and Mr Zhang (and the equivalent prayers 11 and 12 in relation to Giant and the same individuals) seek orders pursuant to r 46.2 of the UCPR or the Court's inherent jurisdiction, requiring the filing of detailed lists of the assets and liabilities of the respective trusts and of the transactions of those trusts (specifying all money received and disbursed); and requiring verification of those lists (with a requirement of disclosure by the respective individuals to VIP Sale or Giant, as the case may be, of all documents and information in their possession to enable the companies to comply with the order against them).
2. As to r 46.2, this applies in relation to the remedy of account, strictly so-called - a remedy which is discretionary (see Mulherin v Quinn Villages Pty Ltd [2007] QSC 231 at [22]), including as to the time and manner in which any such account should be ordered. The process of taking an account involves more than a mere direction to inquire and report but proceeds upon an assumption that the party calling for the account is entitled to the sum found due after the accounting is undertaken (see Hons v Hons (2010) 3 ASTLR 278; [2010] NSWSC 247 in which reference was made to Doss v Doss (1843) 3 Moo Ind App 175 at 196-197; (1843) 18 ER 464 at 472; Rapid Metal Developments (Aust) Pty Ltd v Rosato [1971] Qd R 82 per Wanstall J; and Sharpe v Goodhew (unreported, 11 December 1992, in proceedings FED Q16/1989 at [6], per Drummond J).
3. Rule 46.2 of the UCPR provides: (1) If a party claims an account or makes a claim which involves taking an account, the court may, on application by that party at any stage of the proceedings - (a) order that an account be taken, and (b) order that any amount certified on taking the account to be due to any party be paid to him or her. (2) The court may not make an order under subrule (1)(a) - (a) against a defendant who has not filed an appearance, unless he or she is in default of appearance, or (b) if it appears that there is some preliminary question to be determined.
4. In Hancock v Reinhart (2015) 13 ASTLR 1; [2015] NSWSC 646 (at [338]) Brereton J cited Juul v Northey [2010] NSWCA 211, saying that "[a] plaintiff who seeks the remedy of an account must prove that the defendant is an accounting party, and that the plaintiff is entitled to some (uncertain) sum from the defendant"; his Honour there noting that a trustee is obliged to allow the beneficiaries to inspect the trust accounts and documents (Re Simersall (1992) 35 FCR 584; (1992) 108 ALR 375; Spellson v George). Brereton J continued at [339]-[341]: In the relation of trustee and beneficiary, the trustee is an accounting party. It is a fundamental obligation of a trustee to keep and render to the beneficiaries a full and candid record of their stewardship, including all appropriate financial accounts… Waterhouse v Waterhouse (1998) 46 NSWLR 449 at 494 per Windeyer J. That duty to account encompasses a duty to keep records, a duty to report to the beneficiaries and/or the court, and a duty to pay amounts the trustee is obliged to pay to the beneficiaries: Byrnes v Kendle (2011) 243 CLR 253… Except where an account on the wilful default basis is sought - and it is not sought here - a beneficiary's entitlement to an account does not depend on alleging or establishing any default or breach of trust. As Powell J (as he then was) put it in Spellson v George (1987) 11 NSWLR 300 at 315-16 (Spellson): This being the essential nature of the position of a trustee, and the liability to account being an essential ingredient in it, it seems to me that it is inescapable that the cestuis que trust, or any one of the cestuis que trust, have, or has, a correlative right to approach the Court for its assistance in enforcing the personal obligation of the trustee, and, in particular, in enforcing the trustee's obligation to account. Since that right is, as it seems to me, a fundamental right of the cestuis que trust, or of a cestui que trust, it seems to me that it is not correct to say that its enforcement by the court is dependent upon the cestuis que trust, or the cestui que trust in question, first raising an allegation, or establishing a prima facie case, of fraud or some other like breach of trust. On the contrary, so it seems to me, where the court's assistance in enforcing the trustee's obligation to account is invoked, the court should be concerned with only two questions, they being, first, whether the plaintiffs are, or the plaintiff is one of the, cestuis que trust, and, second, whether the defendant trustee has failed to observe his obligation to account. The only defences to a claim for accounts in common form, where liability to account is established, are (1) release, (2) that the defendant has already rendered proper accounts and the amount due has been paid, or (3) settled accounts: Dawson v Dawson (1737) 1 Atk 1 ; 26 ER 1 ; Young, Croft and Smith, On Equity at [16.1340].
5. I am not persuaded that the jurisdiction to order an account, as such, is here warranted at this stage in the proceeding.
6. What the plaintiffs in effect appear to be seeking is not an account in the sense considered above, but orders requiring the trustee to account (in the sense of the obligation to account referred to in the Campbell Article to which I have referred above; i.e., orders that require an explanation of what occurred in relation to the financial transactions recorded in the accounting documents, which the plaintiffs have already been provided - akin perhaps to the making of an affidavit disclosing assets that is commonly made on a freezing order application; or an affidavit vouching for discovery of the kind that was ordered by Brereton J in the Rinehart Trust Documents decision).
7. I note that in the Rinehart Trust Documents decision, those documents held by agents of the outgoing trustee were considered necessarily within the outgoing trustee's possession, custody or power (see at [103], [131]). However, that case, as adverted to above, concerned an outgoing trustee, in respect of whom serious concerns had been expressed by Brereton J himself in the course of the proceedings before him and in his various judgments. His Honour ultimately required the outgoing trustee to go on oath and provide such an affidavit verifying delivery to clarify the scope of the order, because the first defendant had "adopted a misconceived narrow view of what is a 'document of the Trust'" (see [110]).
8. In circumstances where orders for the service of evidence in the present proceeding are yet to be made, I consider that it is premature to make such an order. This is not a case of a freezing order application where there is urgency in ascertaining the whereabouts of funds over which there is a claim. This is litigation that ought to proceed in the ordinary course and in accordance with ordinary case management principles informed, of course, by the statutory mandate for the just, quick and cheap resolution of the real issues in dispute.
9. Insofar as there is an obligation of the trustee (here, VIP Sale) to provide an account of transactions, the transaction listing has done so. The plaintiffs cavil with the accuracy and completeness of this account. However, in circumstances where any further such explanation will presumably be given in affidavit evidence on the issues in dispute in the substantive proceeding, I am not persuaded that those orders need to be made at this stage.
10. Accordingly, I do not make the orders sought by prayers 9, 10, 11 and 12 in the notice of motion.

Discovery Orders

1. Prayer 13 of the notice of motion seeks an order for discovery, or preliminary discovery, of the categories of document set out in the Schedule to the letter dated 7 April 2021 from the plaintiffs' solicitors to the Zhang defendants' solicitors.
2. I deal first with the position in relation to orders for discovery. The Practice Note, introduced in March 2012, provides that in proceedings in this Division, disclosure should not occur before evidence has been served; and that disclosure should only occur if it is necessary (in the sense of what is reasonably required for a fair trial - see In the matter of Gerard Cassegrain & Co Pty Ltd - Cassegrain v Gerard Cassegrain & Co Pty Ltd [2011] NSWSC 241 at [20] (Cassegrain) for the resolution of the real issues in dispute in the proceedings.
3. The Practice Note relevantly provides that: 4. The Court will not make an order for disclosure of documents (disclosure) until the parties to the proceedings have served their evidence, unless there are exceptional circumstances necessitating disclosure. 5. There will be no order for disclosure in any proceedings in the Equity Division unless it is necessary for the resolution of the real issues in dispute in the proceedings. 6. Any application for an order for disclosure, consensual or otherwise, must be supported by an affidavit setting out: the reason why disclosure is necessary for the resolution of the real issues in dispute in the proceedings; the classes of documents in respect of which disclosure is sought; and the likely cost of such disclosure.
4. The purpose of the Practice Note is to ensure that disclosure is "confined to the real issues between the parties as defined by not only the pleadings, but also the evidence" (see Bergin CJ in Eq in Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393 at [64]-[66]).
5. As noted, the plaintiffs have also referred to the Campbell Article by the Hon JC Campbell. In that article, the author said the following regarding the grant of disclosure orders (at 146/147): In the context of disclosure of information concerning trusts, the exercise of any of these discretions must take into account the relevant principle, namely, that the task of the court is to require the particular trustee in question faithfully to perform the intention of the settlor and the office of trustee, and if the trustee has strayed from that course, to make whatever order is appropriate in the circumstances to enable that intention to be effected, and whatever is necessary to carry out that office to be done. Concerning very many situations where a beneficiary seeks access to information about a trust, the outcome will be every bit as predictable as the outcome of, say, a suit for specific performance - that is, there will be some clear cases, and some not so clear cases. … The previous case law has recognised, even concerning cases where the beneficiary has a vested interest, that the beneficiary is usually entitled to information, but entitlement always depends on the circumstances of the individual case.
6. In the present case, I am not persuaded that exceptional circumstances for disclosure at this stage have been shown. Although I accept that disclosure at a later stage of the proceeding (after evidence has been served) may well be necessary for the resolution of the real issues in dispute in the proceeding (not least because complaint is made as to transactions in respect of which the documentary evidence is not in the plaintiffs' hands), it seems to me that there is much force in the complaint that the present application subverts the process of disclosure in this Division of the Court.
7. As to the application for preliminary discovery, the purpose of such discovery is to obtain information for the purpose of enabling a decision to be made as to whether there is a cause of action (see Findex Group Ltd v iiNet Ltd [2019] NSWSC 1198 at [54]).
8. As I noted in Pharmacy Guild of Australia v Ramsay Health Care Ltd [2019] NSWSC 1045 (Pharmacy Guild) (see from [252]-[254], with reference to Murray v Wheeler [2013] NSWSC 137 per Bergin CJ in Eq; Contour Building and Construction Pty Ltd v Kerr [2008] NSWSC 883 per Barrett J, as his Honour then was), an order for preliminary discovery can only be made if it appears to the Court that the applicant has made reasonable enquiries and, notwithstanding the reasonable enquiries, the applicant has been unable to obtain sufficient information to decide whether or not to commence proceedings against the prospective defendant. The preliminary discovery jurisdiction is not appropriately invoked in order to "build up a case which an applicant has already decided, or could decide to bring" (see Ritchie's Uniform Civil Procedure NSW, vol 1 at [5.3.15] and the cases there cited, including St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147; [2004] FCA 1360; cited with approval in Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 169 FCR 435; [2008] FCAFC 133 at [36]).
9. In the present case, there is no doubt that the plaintiffs have decided to commence the proceeding and (though they have been for some time in the throes of amending their pleadings) have already been able to plead and to some degree particularise their claim. I understand that the desire to seek all of the documentary evidence at this stage is put on the basis that it is consistent with the just, quick and cheap resolution of the real issues in dispute (and to obviate the need to seek leave further to amend the pleading at a later time).
10. However, the preliminary discovery jurisdiction is not appropriately invoked for the reasons set out above; and to make an order for disclosure now (other than if that be for the purposes of a general administration order or on another of the bases here sought) would in my opinion subvert the clear objectives of the disclosure rules applicable in this Division.
11. Accordingly, I do not grant the relief sought by the Discovery Orders (prayer 13) as such.

Interrogatories orders

1. Prayers 14 and 15 seek orders against the Zhang defendants and the Fang defendants, respectively, in effect requiring answers to interrogatories, the questions set out in the letters dated 7 April 2021 from the plaintiffs' solicitors to the Zhang defendants' solicitors and Fang defendants' solicitors, respectively (as well as, in the Zhang defendants' case, to the four further questions set out in prayer 14 of the notice of motion).
2. In Australian Competition and Consumer Commission (ACCC) v Cornerstone Investment Aust Pty Ltd (No 2) [2017] FCA 393, Gleeson J (sitting in the Federal Court of Australia as her Honour then was) considered (at [10]-[11]) the principles underlying the ordering of interrogatories. It was noted that an object of interrogatories is to obtain admissions as to facts which will support the case of the interrogating party (WA Pines Pty Ltd v Bannerman [1980] FCA 79); and that "an interrogatory may be objected to when it is too wide, fishing or immaterial, or if it is unfair or unreasonable in the sense that the burden of answering it far outweighs the likely benefit which may be adduced from the answer" (reference being made to Austal Ships Pty Ltd v Incat Australia Pty Ltd (No 3) [2010] FCA 795 (Austal Ships).
3. Her Honour continued, citing Aspar Autobarn Co-Operative Society v Dovala Pty Ltd (1987) 16 FCR 284 (per Woodward J) at 285: If the use of interrogatories is to be effective, the task must be approached responsibly on both sides. It should not be seen as a battle of wits, or indeed as any form of contest. It is an opportunity to assist the parties and the court to have the matter prepared for trial as quickly and as cheaply as possible. The chief obligations on the interrogator are to ask questions as clearly and concisely as possible, and to ask only those questions which really require an answer in the particular case - by way of providing information not already known or making a relevant and required admission - in order to advance the interrogator's case or help to meet the opposition's case.
4. Her Honour noted that (at [12]) that it was unlikely that interrogatories would be permitted as a substitute for discovery of documents (citing Austal Ships at [7]).
5. As to whether an order for interrogatories is "necessary", a proposed interrogatory must have a relevant connection with a matter in issue in the proceedings (see Ritchie's at [22.1.10] and the cases there cited, including Seidler v John Fairfax & Sons Ltd [1983] 2 NSWLR 390 at 393; Tiver v Tiver [1960] SASR 40 at 50; and Attorney-General v Gaskill (1882) 20 Ch D 519). A relevant connection includes matters that may be relevant to determination of facts in issue and directly probative of facts in issue (Potters Sulphide Ore Treatment Ltd v Sulphide Corp Ltd (1911) 13 CLR 101 at 110-111). In Chong v Nguyen [2005] NSWSC 588, Rothman J said (at [16]): 16. The word "necessary" when used in relation to a requirement on the exercise of a power granted to a court should generally and does here mean "reasonably required or legally ancillary" to the achievement of the goal, in this case, of a fair trial. I refer to the joint judgment of Gaudron, Gummow and Callinan JJ in Pelechowski v Registrar, Court of Appeal (NSW) [1999] HCA 19 ; 198 CLR 435 which, while determining whether there was a valid basis for contempt proceedings, examined the power of the District Court to issue injunctive relief. They said: The term "necessary" in such a setting as this is to be understood in the sense given it by Pollock CB in Attorney-General v Walker (1849) 3 Exch 242 ; 154 ER 833, namely as identifying a power to make orders which are reasonably required or legally ancillary to the accomplishment of the specific remedies for enforcement provided in Division 4 of Part 3 of the District Court Act. In this setting, the term "necessary" does not have the meaning of "essential"; rather it is to be "subjected to the touchstone of reasonableness" (State Drug Crime Commission (NSW) v Chapman (1987) 12 NSWLR 477 at 452).
6. Ritchie's commentary at [22.1.17] includes the proposition that it is consistent with the mandatory provisions of ss 56-61 of the Civil Procedure Act for interrogatories directed to obtaining admissions, explaining the contents of documents "or that otherwise offer a realistic prospect of reducing the length and/or the cost of the proceedings" may be regarded as necessary (even where the interrogatories relate to matters that might otherwise be reasonably expected to be the subject of a witness' evidence at a final hearing), referring to Cassegrain (at [20]-[36]).
7. In the present case, I consider that many of the interrogatories go well beyond the permissible scope for interrogatories or what is necessary at the present stage (particularly those relating to the motivation for structuring arrangements in a particular way, the parties' motivations not having been demonstrated to be relevant to an issue in the proceeding). Many of the interrogatories are premised on propositions that are disputed by the defendants (so, for example, questions as to why a representation was made, or why promises were not complied with, are questions that assume that the making of such representations and promises will be established on the evidence). I do not consider that it is appropriate that interrogatories of this volume and kind be administered at this stage of the proceeding, nor would I make such an order as an incident of the provision of information in lieu of a general administration suit.

Conclusion

1. Other than the order sought by prayer 1 (not opposed by Giant) for the production by Giant of books and records of the trust (properly so confined - as set out above) and other than the liberty I propose to give for the plaintiffs to identify any particular corporate books and records of VIP Sale to which they seek access pursuant to s 247A of the Corporations Act (and of which they have not already been provided with copies), I will dismiss the notice of motion filed on 13 April 2021. While I understand that the plaintiffs are frustrated at the perceived inadequacy of answers to their requests for information to date, the notice of motion is extraordinarily broad in scope (particularly the interrogatories sought to be administered) and in my opinion the applications for discovery and the like are premature.
2. I accept that the plaintiffs have serious concerns as to the maladministration of the respective trusts and that in due course much of the information that has been sought may well have to be provided on discovery or, as a practical matter, in the form of affidavit evidence from the defendants responding to the plaintiffs' claims. Therefore, I simply propose to reserve the question of costs to be dealt with at a later stage in the proceedings (whether at the time of determination of the application for a general administration order or at the final hearing, a matter on which I will seek the parties' views).

Orders

1. For the above reasons, I make the following orders: 1. Order that within 21 days, the seventh defendant (Giant) provide to the plaintiffs access for inspection (and permit the plaintiffs at their expense to take a copy of) all books and records of the Everspring Develop Group Unit Trust in its possession (and of any such books and records in the possession of any agent of the seventh defendant of which the seventh defendant is entitled to call for production from that agent and which on request are produced to it); noting for the avoidance of doubt that the expression "books and records" of the trust bears the meaning explained in these reasons. 2. Liberty to the plaintiffs to identify within 14 days a specific list of company books and records of the eighth defendant (VIP Sale) (being documents with which the plaintiffs have not already been provided), access to which is sought pursuant to s 247A of the Corporations Act. 3. Direct the eighth defendant to notify the plaintiffs within 7 days of the provision of any such list pursuant to Order 2 above whether there is a dispute as to production of those documents. 4. If there remains a dispute as to production of the documents listed in accordance with Order 2 above, liberty to the plaintiffs to apply for the matter to be listed before me for determination of the dispute as to access at an appropriate time. 5. Otherwise dismiss the notice of motion filed 13 April 2021. 6. Reserve the question of costs.

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