Estate of the late Connie Wai Fong Wong [2021] NSWSC 967 (9 July 2021)

Last Updated: 4 August 2021

Supreme Court New South Wales

Case Name:	Estate of the late Connie Wai Fong Wong
Medium Neutral Citation:	[2021] NSWSC 967
Hearing Date(s):	9 July 2021
Decision Date:	9 July 2021
Jurisdiction:	Equity
Before:	Ward CJ in Eq
Decision:	1. Order pursuant to s 63 of the Trustee Act 1925 (NSW), that the plaintiffs and any current trustees of the Education Fund referred to in clause 8.1 of the Will dated 15 December 1999 of the late Connie Wai Fong Wong are justified in proceeding to administer the Education Fund on the basis that: a. the constitution of the Education Fund said to be set out as an annexure to the said Will was not annexed and does not exist. b. other clauses of the said Will sufficiently constitute the Education Fund, namely, clauses 2.1, 2.2, 3.1, 3.2, 8.1, 8.2 and 9. c. clause 3.2(j) of the said Will empowers the trustees to reimburse the beneficiaries of the Education Fund, or their parents or guardians, for fees already paid for school and university education, provided that there is some proper proof of expenditure. 2. Note that Anthony Joseph Gagliano has, by consent signed and dated 18 March 2021, consented to act as the third trustee of the Education Fund created under the Will dated 15 December 1999 of Connie Wai Fong Wong if so required by the Court. 3. Order pursuant to s 70 of the Trustee Act 1925 (NSW), that Anthony Joseph Gagliano be appointed as a new trustee of the Education Fund created under the Will dated 15 December 1999 of the late Connie Wai Fong Wong in substitution for Sai Ki Yeung on the basis that it is expedient for such appointment. 4. Grant liberty to Sai Ki Yeung to make application for variation of the above order in the event that Mr Yeung is able to perform the duties and functions of a trustee of the Education Fund created by the Will dated 15 December 1999 of the late Connie Wai Fong Wong. 5. Order the plaintiff’s costs of the summons be paid out of the Education Fund created by the Will dated 15 December 1999 of the late Connie Wai Fong Wong on the indemnity basis. 6. Note that the liberty to apply granted to Mr Yeung does not operate to preclude the current trustees, including Mr Gagliano, who has been appointed in substitution of Mr Yeung, from proceeding to administer the Education Fund established by the Will dated 15 December 1999 of the late Connie Wai Fong Wong in the ordinary course.
Catchwords:	SUCCESSION — Trusts and trustees — Judicial advice, Trustee Act 1925 (NSW), s 63 — Substitution of trustee, Trustee Act 1925 (NSW), s 70
Legislation Cited:	Trustee Act 1925 (NSW), ss 63, 70
Cases Cited:	In re Richards (1931) 31 SR (NSW) Langston v Langston [1834] EngR 190; (1834) 6 ER 1128
Texts Cited:	Heydon, JD and MJ Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths)
Category:	Principal judgment
Parties:	Sandra Fong (First Plaintiff) Keith Chi Kit Wong (Second Plaintiff) Sai Ki Yeung (Third Plaintiff)
Representation:	Counsel: M Meek SC (Plaintiffs) Solicitors: Carroll & O’Dea Lawyers (Plaintiffs)
File Number(s):	2021/00096140
Publication Restriction:	Nil

JUDGMENT

1. HER HONOUR: This is an application by summons filed on 7 April 2021, by the plaintiffs who are the three named executors of the Will dated 15 December 1999 of the late Connie Wai Fong Wong (the deceased). The deceased died on 27 February 2012, her husband having pre-deceased. The deceased died without having any children.
2. On this application I have read the affidavits sworn 22 March 2021 of the first plaintiff, Sandra Fong, who is one of the three executors; the affidavit sworn 19 March 2021 of Keith Chi Kit Wong, the second plaintiff who is another of the three executors; and the affidavit affirmed 5 July 2021 of Grace Bette Brophy, who is a solicitor with carriage of the matter.
3. The third of the executors (the third plaintiff, Sai Ki Yeung), who now resides in Hong Kong, does not speak English, or at least does not speak sufficient English to be able to communicate with the other two executors.
4. The summons, which is brought seeking judicial advice pursuant to s 63 of the Trustee Act 1925 (NSW) (Trustee Act), sought the following relief:

1. An order as to whether, pursuant to section 63 of the Trustee Act 1925 (NSW) of the Equity jurisdiction of the Court, the plaintiffs are justified in proceeding to administer the Education Fund referred to in clause 8.1 of the Will dated 15 September 1999 of the late Connie Wai Fong Wong (“Will”), probate of which was granted to the plaintiffs on 1 February 2013 on the basis that:

(a) the Constitution of the Education Fund said to be set out as an Annexure to the Will was not annexed and does not exist;
(b) other clauses of the Will sufficiently constitute the Fund, namely clauses 2.1, 2.2, 3.1, 3.2, 8.1, 8.2 and 9;
(c) clause 3.2(j) of the Will empowers the plaintiffs as trustees to reimburse the beneficiaries of the Education Fund or their parents or guardians for fees already paid for school and university tuition.

2. An order that the two Australian resident trustees can administer the Fund without any involvement of Sai Ki Yeung pending delivery from him of signed deed of retirement.

5. However, as I will explain shortly, the relief sought in prayer 2 is not now pressed. Instead, what is sought is an order pursuant to s 70 of the Trustee Act, that a solicitor, Mr Anthony Joseph Gagliano, be appointed as a new trustee, in circumstances where Mr Gagliano has consented, by a consent signed and dated 18 March 2021, to be appointed “to act as a third trustee of the Education Fund created under the Will of Connie Wai Fong Wong dated 15 December 1999 if so required by the Court” (Grace Brophy’s affidavit affirmed 5 July 2021, Annexure P).

Background

6. The background to the matter is set out in the statement of facts which was filed on 9 April 2021. Briefly, those facts are as follows.
7. As noted above, the deceased died on 27 February 2012. The deceased left a Will dated 15 December 1999, which had been drafted by Mr Gagliano (in circumstances that I will come back to shortly). Probate of the Will was granted to the plaintiffs as executors on 1 February 2013, and there is in evidence a copy of the grant of Probate.
8. Under the Will there were certain bequests in relation to the deceased’s personal estate, by cl 4, including bequests made to a number of Church entities. Clause 5 involved a bequest of shares in particular named companies. Clause 6 dealt with the 50% interest which the deceased held in some property in Neutral Bay, the other joint owner of that property being the deceased’s company named in cl 6.
9. Relevantly, cl 8.1 of the Will provided as follows:

8.1 It is my wish to establish an education fund for the children of the following to enable those children to advance their education. It is my direction that applications for distributions from the education fund shall only be made in respect of the child’s education from Year 7 and onwards. The education fund will terminate twenty-five years from the date of my death, and the funds remaining shall be distributed in accordance with my further directions. The constitution of the education fund is as set out in the annexure to this Will.

10. Effectively, the provisions of the Will provided for a net 10% share of the proceeds of sale of the deceased’s property in Neutral Bay to be divided amongst the children of the persons named in cl 8.2, and for the balance, i.e. 90% of the net proceeds of sale, to be allocated to the Education Fund referred to in cl 8.1 of the Will.
11. It was the deceased’s direction under the Will that the Education Fund was to be established to enable those children to advance their education, and it was the deceased’s direction that applications for distributions from the Education Fund only be made in respect of the child’s education from year seven and onwards (see cl 8.1). The clause provided that the Education Fund was to terminate 25 years from the date of the deceased’s death. Further, the clause provided that “the funds remaining shall be distributed in accordance with my further directions”. The further directions are contained in cl 9 of the Will and provide for any remaining proceeds within the Education Fund at the winding up of the fund to be divided equally between the surviving children of any of the families named in cl 8.2 who were the original beneficiaries of the Education Fund and, if more than one, as tenants in common in equal shares.
12. Clause 8.1 provided that the constitution of the Education Fund was as set out in the annexure to the Will. There is no dispute that there was no annexure to the Will, in circumstances that I will come back to shortly.
13. On 30 June 2017, the executors commenced proceedings in this Court seeking orders regarding construction of the Will and an order for distribution of the estate. The parties to that litigation included various charity beneficiaries, as referred to in the subsequent deed of settlement resolving the proceedings, together with a defendant who was a representative of the minor persons who are potentially beneficiaries of the Education Fund pursuant to the Will (see Sandra Fong’s affidavit sworn 22 March 2021, Annexure B).
14. The parties to that litigation entered into a deed of settlement and release on 12 February 2019; and, on 19 February 2019, Kunc J made orders authorising the executors to distribute the estate of the deceased as to the proceeds of sale of the Neutral Bay property as set out in cl 6 of the deceased’s will, otherwise in accordance with the deed of settlement and release dated 12 February 2019 between the parties (see order 1 of the orders made on 19 February 2019 and entered on 26 February 2019).
15. In the affidavit of Sandra Fong, there is annexed a copy of an earlier affidavit sworn 30 June 2017 by Mr Gagliano, apparently in relation to the 2017 proceedings. In that affidavit, Mr Gagliano annexes notes that he had located of a conference with the deceased on 10 December 1999 in relation to her Will. Mr Gagliano has deposed that the deceased gave him some handwritten notes outlining the terms of the Will. Those notes refer to the appointment of the three executors and include reference to a trust fund to be set up to provide funding for the education of the children of the named persons set out in that document.
16. The handwritten notes also provide that the Education Fund was to be for a period of 25 years and that, after 25 years, the Neutral Bay property was to be sold (which I note is not consistent with the terms of the Will that was ultimately executed).
17. Mr Gagliano has a file note dated 15 December 1999 of the conference with the deceased on 10 December 1999 in relation to her Will. That note refers to the deceased’s insistence that, as she was going away, she wanted to have something before she left. Mr Gagliano’s note records that he spent about 45 minutes with the deceased, but that “her affairs are a bit complicated and she is not entirely clear with her instructions”. The note makes clear that Mr Gagliano was prepared to provide something for the deceased, but that he had warned her it would not be the final document because there were a number of issues which he thought needed to be explored and it would probably be necessary to speak to her accountant.
18. By letter dated 15 December 1999, Mr Gagliano’s firm forwarded to the deceased a draft Will “based on the notes you left us and our discussions with you, but with the knowledge that this Will cannot be said to be a Will which is complete and which will necessarily meet all of your wishes”. The letter went on to say:

As we advised you, there are a number of issues which need much more clarification than is available in the short time which we had to prepare this initial draft, and we believe that it will be necessary to have some input from your accountant, particularly in relation to any trusts which you have in place, and any assets which are part of those trusts.
We have done the best we could in the time available and with the information available, but upon your return from overseas we believe that we will need to study the matter a great deal more before we can be confident that we have achieved the desired result.

19. It would appear that what then happened was that the deceased, notwithstanding that she had been advised that it was a draft Will and was incomplete, proceeded to execute the Will on 15 December 1999 (which explains the inaccurate reference to a constitution of the Education Fund being annexed). The Will was witnessed (I interpose to note, surprisingly, since Mr Gagliano knew it was complete) by Mr Gagliano and by a secretary of his firm; and, as I have already noted, the Will was admitted to Probate on 1 February 2013.
20. The statement of facts records that the estate has been substantially administered and that the three plaintiff executors have taken on the role of trustees pursuant to cl 3.1 of the Will. That clause provides as follows:

3.1 The Executors, in their capacity as executors and trustees, in the administration of my estate and the trusts created hereunder, shall have regard to the fact that by this Will I have sought to make adequate provisions for the various beneficiaries and by this Will I have sought to direct assets towards achieving my wishes. I therefore empower my trustees to act accordingly to achieve my goals set out in this Will.

21. Clause 3.2 sets out the powers of the trustees, including:

(j) Power in their absolute discretion to apply the whole or any part of the income (and not more than one half share of the capital) of the share whether expectant contingent or vested of any child taking under the trusts of this my Will in or towards the maintenance education or advancement or otherwise for the benefit of such child and for that purpose to pay such income (or share of capital) to the guardian for the time being of such child without being bound to see to the application thereof AND I DIRECT that for the purposes of this clause accumulations of past years shall be available as if they were income of the current year AND I DECLARE that the power shall extend so as to authorise any trustees to make reimbursement of any amounts paid for the maintenance education or otherwise for the advancement or benefit of any such persons.

22. The statement of facts records that, as the third trustee does not reside in Australia, he has expressed a desire to be relieved of his obligations as trustee and has communicated to the two resident plaintiff trustees that he wishes to resign and agrees that they will continue to manage the Education Fund. However, the correspondence to which I have been taken (see the annexures to Ms Brophy’s affidavit) does not make clear that (or how) Mr Yeung has expressed that view. What appears to have occurred is that there was communication with Mr Yeung’s son, who resides in Sydney, in December 2019 seeking his assistance in ascertaining his father’s instructions regarding his appointment as trustee of the Education Fund to date and noting that “in order to relieve Mr Yeung from his obligations as trustee, we must obtain his consent directly”. (Implicitly, therefore, it seems that there was some communication to suggest that Mr Yeung may have wished to be relieved of those duties.)
23. There followed a series of email communications between the solicitors and Mr Yeung’s son in relation to the matter, in the course of which a deed of retirement of trustee was prepared and the deed was translated into Cantonese and forwarded to Mr Yeung by email to his son. It appears that arrangements were then sought to be made for the deed to be executed by Mr Yeung before a public notary in Hong Kong. However, the difficulty that arose was that, as a result of the current COVID-19 pandemic, Mr Yeung’s son advised the solicitors by email on 14 May 2020 that, owing to the coronavirus pandemic “we have not been able to find the appropriate public notary or equivalent without having to travel”. The email noted that Mr Yeung was considered elderly and would be at risk of severe infection.
24. There were then communications in relation to the proposed remote witnessing of the deed by way of audio visual link, which did not result in any such witnessing of the deed.
25. What then occurred was that there were communications in November (after Counsel’s advice had been sought) with Mr Yeung’s son, as to a proposal to seek to file papers in court seeking directions on the terms of the Education Fund set up under the Will of the deceased; and, after some communications in relation to that, Mr Yeung’s son confirmed on 13 December 2020 that he had spoken to Mr Yeung and that Mr Yeung agreed with proceeding to file papers as planned, noting that further discussion could occur as the pandemic situation allows.
26. It is not clear on the material before me whether the summons, as filed, was forwarded to Mr Yeung via his son.

Opinion of Senior Counsel

27. As is the practice in applications for judicial advice of this kind, I have had the benefit of an opinion from Senior Counsel as to the issues raised in the application. In particular, Senior Counsel is of the view, expressed in the memorandum of opinion dated 19 April 2021, that (notwithstanding the fact that cl 8.1 refers to the constitution of the Education Fund as an annexure) the fund itself is sufficiently constituted by the other provisions of the Will.
28. In particular, reference is made to the fact that cl 8.1 creates the Education Fund; that cl 8.1 provides for the term of the Education Fund, (i.e., termination 25 years from the death of the deceased); that cl 8.2 identifies the beneficiaries of the Education Fund; and that cl 9 makes provision for the final distribution of the Education Fund. It is Senior Counsel’s opinion that cll 2.1 and 3.1 sufficiently establish the trustees of the Education Fund and the powers of the trustees in relation to the Education Fund.
29. It is Senior Counsel’s opinion that the provisions for the appointment of trustees and the powers of trustees, including powers of management and advancement in cll 2.1 and 3 of the Will, can reasonably be construed as applying to the Education Fund in the absence of any identifiable constitution document. It is submitted that the reference in cll 2.1 and 3.1, respectively, to “this will and the trusts arising hereunder” and “in the administration of my estate in the trusts created hereunder”; and the last sentence of cl 3.1 empowering “my trustees to act accordingly to achieve the goals set out in this Will”, are arguably sufficient to provide enough certainty regarding the Education Fund to make it operative, or at least to prevent failure for uncertainty.
30. I note that one strives to construe a Will to avoid the failure of a provision or gift under the Will (see, for example, Langston v Langston [1834] EngR 190; (1834) 6 ER 1128 at 1147).
31. The memorandum of opinion of Senior Counsel deals with the power under cl 3.2(j) of the Will which is relevant to the question of advancement to minors for education and reimbursement. It is not necessary here to summarise the advice or opinion in that regard. I note that reference is made to what was said in In re Richards [1931] NSWStRp 38; (1931) 31 SR (NSW) 565 at 566 in relation to the principles regarding reimbursement of past maintenance. Senior Counsel’s opinion is that the power under cl 3.2(j) empowers the plaintiffs as trustees to reimburse the beneficiaries of the Education Fund, or their parents, for funds already paid for school and university tuition, provided there is some proper proof of expenditure; and I agree with that opinion.
32. Senior Counsel’s advice also considers the question as to whether the decision making of the trustees of the fund is required to be unanimous or a majority decision, and for the reasons set out in the opinion, concludes that the better view is that, in carrying out their role as trustees of the Education Fund, the trustees are required to act unanimously, albeit that there is a question as to whether or not cl 2.2(b) would permit a majority decision of the trustees (as opposed to a majority decision of the executors to which the clause in terms seems to be addressed).

Determination

33. It seems to me more likely that the trustees are required to act unanimously in the administration of the Education Fund. This causes an issue because of the difficulty in obtaining instructions and/or consent in relation to the administration of the fund from Mr Yeung while he is based in Hong Kong and under the restrictions caused by his age and the ongoing pandemic.
34. Section 70 of the Trustee Act empowers the Court to make an order for the appointment of a trustee or new trustees, either in substitution or in addition to any existing trustee or trustees. Section 70(2) provides:

The appointment may be made whenever it is expedient to appoint a trustee or new trustees and it is inexpedient, difficult or impracticable so to do without the assistance of the Court.

35. The concept of what is expedient or inexpedient has been considered in various authorities. I refer to the commentary in Heydon, JD and MJ Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths), see at [15.46] and in particular the authorities cited in footnote 105.
36. In my opinion, it is expedient, in circumstances where the Education Fund has not yet been able to be administered in accordance with the deceased’s wishes, and where there is a practical difficulty communicating with Mr Yeung, that the power under s 70 of the Trustee Act be exercised. However, I consider that the proposed short minutes of order (which contemplate the appointment of Mr Gagliano as a new trustee in addition to the existing trustees, albeit limited to acting as third trustee in place of Mr Yeung pending receipt of a deed of retirement of Mr Yeung, or further order of the Court), would not necessarily resolve the issue which arises as to the requirement for unanimous consent of the trustees.
37. In my opinion, the appropriate order to make is an order that Mr Gagliano be appointed as a new trustee in substitution for Mr Yeung, which would have the effect that Mr Yeung would then be removed as a trustee of the Education Fund. In circumstances where it is not wholly apparent that Mr Yeung has consented to his removal as trustee, or retirement as trustee of the Education Fund, it would be appropriate to make provision enabling him to exercise liberty to apply for a variation of that order in due course were he to be in a position (and wish) to perform the duties as a trustee of the Education Fund.
38. In those circumstances and for those reasons I make the following orders:

(1) Order pursuant to s 63 of the Trustee Act 1925 (NSW), that the plaintiffs and any current trustees of the Education Fund referred to in clause 8.1 of the Will dated 15 December 1999 of the late Connie Wai Fong Wong are justified in proceeding to administer the Education Fund on the basis that:

(a) the constitution of the Education Fund said to be set out as an annexure to the said Will was not annexed and does not exist.

(b) other clauses of the said Will sufficiently constitute the Education Fund, namely, clauses 2.1, 2.2, 3.1, 3.2, 8.1, 8.2 and 9.

(c) clause 3.2(j) of the said Will empowers the trustees to reimburse the beneficiaries of the Education Fund, or their parents or guardians, for fees already paid for school and university education, provided that there is some proper proof of expenditure.

(2) Note that Anthony Joseph Gagliano has, by consent signed and dated 18 March 2021, consented to act as the third trustee of the Education Fund created under the Will dated 15 December 1999 of the late Connie Wai Fong Wong if so required by the Court.

(3) Order pursuant to s 70 of the Trustee Act 1925 (NSW), that Anthony Joseph Gagliano be appointed as a new trustee of the Education Fund created under the Will dated 15 December 1999 of the late Connie Wai Fong Wong in substitution for Sai Ki Yeung on the basis that it is expedient for such appointment.

(4) Grant liberty to Sai Ki Yeung to make application for variation of the above order in the event that Mr Yeung is able to perform the duties and functions of a trustee of the Education Fund created by the Will dated 15 December 1999 of Connie Wai Fong Wong.

(5) Order the plaintiff’s costs of the summons be paid out of the Education Fund created by the Will dated 15 December 1999 of the late Connie Wai Fong Wong on the indemnity basis.

(6) Note that the liberty to apply granted to Mr Yeung does not operate to preclude the current trustees, including Mr Gagliano, who has been appointed in substitution of Mr Yeung from proceeding to administer the Education Fund established by the Will dated 15 December 1999 of the late Connie Wai Fong Wong in the ordinary course.

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