Richard Tjiong discusses

Richard Tjiong –

Richard Tjiong – A Family Feud and the Australian Legal System

Summary

The patriarch in a Chinese family bought an apartment in Burwood in 1976 and entrusted it to his eldest son George as trustee. The family was steep in Confucius culture, characterised by male dominance, and merits are ranked by age seniority; Father and George kept the arrangement to themselves. After the death of the father in 1981, George claimed to the family that the apartment was his and that he was the one who had bought it in a filial act to provide a home for his parents. Some years later, when the widowed mother moved out, George sold the apartment. He took the rent and sale money and intermingled it with his own.

After George died in 2004, documents surfaced and disclosed some secrets. From among George’s record emerged two affidavits that he had sworn in 1983 in the lead up to his divorce; he swore that the Burwood apartment was a trust asset and that he had no beneficial interest. Documents from the lawyers who conducted the property transaction in 1976 supported the trust arrangement. Two letters from Father to George in 1976 and 1978 outlined the trust arrangement.

George’s two adult children denied the existence of the property trust, wrongly believing it to be a ruse by their Uncle Richard to divert their inheritance. George had nominated Richard as the sole executor of his estate. The issue of the property trust was settled in a court trial in March 2009 when the trial Judge accepted the clear evidence and affirmed the existence of the trust. He found George had breached his various duties as trustee.

Earlier on in 2004, soon after George’s death, the dispute over the trust sparked a family feud. George’s two children commenced proceedings in 2005 for Richard’s removal as executor on grounds of alleged misconduct. The case reached the court for trial in June 2009. The connection between the dispute over the trust and the children’s efforts to remove Richard was not considered by the court in the trial. Richard was grossly under represented by his defence team; a large amount of critical evidence, available at the time, were not presented to the court. In the absence of these critical evidence, the Judge made a number of findings against him. One critical subpoenaed evidence was withheld by the plaintiffs’ lawyers, leaving the Judge with a perception of perjury; he referred Richard to the DPP. The Court of Appeal does not accept as new evidence those that were available at the trial and that should have been submitted and managed properly in the court below. Richard failed in his appeal.

Part I- Introduction

A feud in a Chinese migrant family in Australia took a tragic and costly turn when it was taken for an adversarial contest in the New South Wales Supreme Court. In the adversarial court system, the litigants are responsible for finding the evidence and for presenting it to the court; the judge acts as an umpire, he enforces the rules of combat and selects the winning argument- based on the evidence that is presented to the court. The litigants are out to win the combat and the truth often takes second place. In court, all parties swear ‘to tell the truth, the whole truth, and nothing but the truth’. However, the adversarial system lends itself to a combatant presenting a selection of the truth that suit their cause. The winner chosen by the judge may sometimes be a skilful liar.

The family feud was caught up in seven court cases. I was the defendant in my personal capacity in ‘the Katrina Case’– see below. In the trial of that case, the court did not get to hear about the other six court cases and how these six cases were interlinked with the issues in my trial- the Judge ended the one legal dispute, but the family squabbles live on while other issues remain unresolved. The adversarial court system is hardly suitable for resolving a highly-charged family feud, where the family needed behavioural professionals rather than lawyers, counselling rather than more fights in an adversarial arena.

The feud started after my eldest brother George died in Sydney on 30 January 2004. He was 73 of age and had a stroke over two years earlier. He left behind a daughter Katrina, then age 40 living in Melbourne and a son Lindsay age 37 living in Darwin. In life, George’s relationships with his two children were highly dysfunctional especially after his acrimonious divorce in 1984 when the children, then age 21 and 18, took the side of their mother.

In his last will, George selected me, his youngest brother, as the sole executor to manage his estate. We were twelve years apart and we were both graduates of the University of Sydney in medicine. George conducted a general family practice in Melbourne before retiring in Sydney in 1998; I was a specialist surgeon in NSW North Mid Coast and relocated to Sydney around the same time. George had not nominated either of his two children as executor in any of his previous three wills. Before George died, Katrina and Lindsay enjoyed a very good relationship with my wife and me- I am godfather to Katrina. After George died, there was a sudden change in Katrina’s attitude; and twelve months later, she took the lead in a court action to remove me as executor (referred to in this article as ‘the Katrina Case’)[1].

After more than four years in the legal system, the Katrina Case reached court hearing in June 2009. At the trial, I was represented by a team of two barristers and a solicitor, all of whom were experienced litigators. However, a significant amount of critical evidence, available at the time of the trial, were not presented to the court, while some other evidence though presented, were not argued or included in the submissions. In short, and for some obscure reasons, I was grossly under-represented.

The judgment was delivered twelve months later- with mixed outcomes. There were some skewed publicities in the press; the Sydney Morning Herald reported ‘Doctor used fraud to take over sibling’s estate’. This is wrong when the doctor concerned was the executor who was already in sole charge of the brother’s assets and affairs- I did not even have to take over the estate as asserted in the newspaper let alone using fraud to do so.

In this article, I am putting on record the underlying intertwining family issues that were lost in my trial and overlooked by the press. My account is based on evidence that existed at the time of the trial.

First, I need to debunk the Sydney Morning Herald report of my so-called fraud and an underlying insinuation that I might have misappropriated some money. The court accepted the following evidence:

  1. No money was missing; my brother’s assets grew from $1.9 million to over $3.6 million gross under my management in the 7 years from the date of his incapacitating stroke to the court hearing in 2009;
  2. Forensic accounting experts expressed the view that the growth was above the performance benchmarks for professional Australian fund managers; and
  3. I and my family did not receive any fees or other benefits for managing my brother’s affairs.

Despite George’s estate being in very good financial order, in early 2007 his children added a claim for $1.6M of damages, alleging that their father’s estate would have further grown by this amount had I invested all of the assets in the Australian share markets. There is inherently no substance whatsoever in this claim, and, despite the GFC in 2007-8, they persisted in prosecuting this claim right through to the second last day of the trial in 2009, when their lawyers withdrew the claim because they simply could not make up the numbers.

Part II- The Family Feud

A claim made by Katrina’s grandmother (who was George’s and my Mum) against George’s deceased estate takes on centre-stage in the family feud and it is the driver behind the Katrina Case as well as five other courts cases. ‘The Grandmother’s Claim’[2] relates to some money that belonged to our late father- Katrina’s grandfather, money which, as the Supreme Court later confirmed, George had misappropriated. Katrina’s grandmother sought the return of the money- which in essence had been stolen from her. Her claim was opposed by Katrina and Lindsay who rejected the overwhelming underlying evidence- the Grandmother’s Claim drove them to take court action against me in a false belief that I had invented the evidence and the claim, and that I was out to deprive them of their inheritance.

The Claim reached Judge Palmer’s court in March 2009; the Judge had no trouble in accepting the clear and unequivocal evidence and found George the wrongdoer (see below). Three months later in 2009, the Katrina Case against me reached the same court for trial, but Judge Palmer did not get to hear the connection between the Grandmother’s Claim with my trial or about other court cases and the intertwining issues.

Besides the Grandmother’s Claim and the Katrina Case, the Supreme Court heard five other court cases between 2004 and 2009, chronologically listed as follows: ‘Elizabeth Smith’s Application’[3],’Richard Tjiong v Kevin Reeves’[4], ‘Katrina’s Injunction Case’[5]and ‘The Chang’s Probate Application’[6]and ‘Elizabeth Smith v Soei Chang’[7]Several different judges were involved in the seven cases; and the presiding judges seemed to have treated the legal issues in each case in relative isolation; they were driven to resolve the instant dispute in their respective court. The courts did not consider the bigger picture of related events and interconnected issues; the system missed the wood for the trees. The media made no reference to the intertwining cases or the underlying family feud, let alone the real fraud committed in the family and the plights of George and my Mother- being Katrina’s grandmother.

The Nature of the Real Fraud in the Family

In 1976, our father bought an apartment in Burwood, a Sydney suburb, and registered it in the name of his eldest son George as trustee- a fact confirmed by Judge Palmer in the trial. In a male-dominated and age-oriented Chinese family tradition, the trust arrangement was kept exclusively confidential between Father and his Number One Son. After Father died in 1981 and around the time George’s divorce was brewing, George started claiming in the family that he had bought the property with his own money in a filial act to provide a home for our parents. In our family, seniority by age continued its dominance to feudal extreme; the family took the words of Number One Son at face value and applauded big brother for his generosity- until after his death when certain documents surfaced and revealed the truth.

After Father died, Mum continued to live alone in the apartment for 13 years. After a series of burglaries in the building and in her apartment in 1994, she moved out and lived with a daughter. George rented the unit for three years and then sold the property. He took the rental income and the sale proceeds and treated them as his own, thereby depriving Mum of her rightful legacy. In 1994, she was then a very healthy 86 years old. Without her legacy, Mum lived on for another 12 on age pension and support from her children.

Two weeks after George’s funeral in 2004, Katrina faxed me a list of George’s past assets in a leaf out of an affidavit that George had sworn for his divorce. She inadvertently drew attention to the Burwood apartment on that list. George in fact swore two affidavits in 1983 for his divorce; and in both, he stated under oath that Father was the purchaser of the Burwood property and George was holding it in trust for his parents.

In the few months after George’s funeral, some other documents of our father surfaced; they had been lost in the homes of my sisters and my brother. These documents included some original letters from the lawyers who had carried out the property transaction in 1976- there were separate letters to Father as the purchaser and to George as the proposed registered holder in the title. There were also two letters from Father to George around the time of the purchase, outlining the trust arrangement. These documents provide further proof of the existence of the trust property beyond George’s sworn declarations in his divorce affidavits.

Mr P. Thornton, a senior lawyer from Ebsworth & Ebsworth, assisted me in managing George’s estate. He found the evidence to be compelling. He advised me that as the executor of George’s estate, I succeeded George as trustee of Father’s Burwood Property Trust. I hold both legal and moral duties to manage the Trust and return the money to the one beneficiary of the Trust- Father’s widow and Katrina’s grandmother.

The Family Feud- George’s Children Opposed Their Grandmother

George’s Family Background

George married an Australian-born nurse in 1962. The marriage was turbulent, marked with frequent squabbles and physical violence. After at least two prolonged periods of separation, it ended in a rancorous divorce in 1984. George was mean in his affection for his older child Katrina. In 1969, Katrina’s mother wrote to my wife and me and described six years old Katrina as a “very disturbed little girl”. After the divorce, George treated her in the image of her mother; he often described her with hostile words unfit for any father to have used. In 1996 when George was in hospital in Melbourne with his first stroke, a social worker from Austin General Hospital described Katrina as the estranged daughter. Her brother Lindsay suffered mild brain impairment after a car accident in his youth.

My Relationship with George’s Children

Before George died, his two adult children shared a very good relationship with my wife and me. I have been Katrina’s godfather, and we treated Katrina as our own – second – daughter. Katrina lives in Melbourne; she had complete freedom to our home in Sydney and she made liberal use of that freedom- as well as our kinship. After George died, I heard from three separate sources in the family that Katrina was painfully aggrieved over her father not having chosen her as executor to manage his estate. Thereafter, it seems that she looked at me as replacing the grudging scrooge that she had viewed in her father. Katrina expressly mistook my efforts as executor to return her grandfather’s stolen money as a charade to steal her inheritance (and that of her brother). Their opposition took on a vicious and vile attack on me personally.

George’s Children Opposed Their Grandmother

Two months after the funeral, Katrina and Lindsay learned of the recent discovery of their grandfather’s trust and how their father George had wrongfully ‘merged’ the grandfather’s trust fund, worth around $340K in 2004, with his own money; George’s estate was then valued at around $2.2M. They rejected outright the affidavits sworn by their own father. My efforts to mediate failed. Within minutes of my disclosure, rancour erupted and rapidly reached crisis. The breakdown in our communication was rendered complete by Katrina’s involvement of lawyers.

Katrina found an immediate champion to her cause in Aunt Elizabeth- George’s (and my) youngest sister. Elizabeth had considered herself as the black sheep in the family and she had held a longstanding self-confessed deep resentment against both her parents and grudge against most of her siblings. Before George died, Elizabeth took little interest in him or his family; after he died, Elizabeth rallied to support Katrina and Lindsay against me.

Together with Aunt Elizabeth and her chosen lawyers, and her own agenda, Katrina and Lindsay did everything they possibly could to prevent the executor in me from returning the stolen money to Katrina’s widowed grandmother- mother to George, Elizabeth and me:

  • The morning after my disclosure to Katrina and Lindsay, over the phone and in a monologue Elizabeth drew a battleline in the family- she was angry over Mum’s claim over the Burwood Property Trust; she thought that this was a ruse to take away the inheritance of George’s children.
  • Within a few days, Katrina instructed her lawyers to remove me as executor and in the ‘mean time’ (her disjointed spelling), to stop Uncle Richard ‘from shifting the funds around’ in a clear reference to my making payments to her grandmother and George’s carers in the family.
  • In an email to her lawyers, she expressed the need to secure her father’s estate and ‘to stop Uncle Richard… before it is too late’; on that same day, I received a phone call ostensibly from the father of one of George’s former patients, heralding a large malpractice claim against George’s estate. This new claim, ‘the Reeves Claim’, in effect froze the estate and indeed stopped me from making any payment out of the estate to anyone- the Reeves Claim served Katrina’s concern to preserve George’s funds as she had expressed to her lawyers in an email on the very same day.
  • In the months that followed, aggressive letters streamed from lawyers who had been selected by Aunt Elizabeth but supposedly acting for Katrina and Lindsay, threatening me not to make any payment to the Katrina’s grandmother or anyone else in the family, followed by several new but baseless allegations against me in relation to my management of George’s estate.
  • In November that year (2004), when my wife and I bought a house in Strathfield for my mother to live in, Katrina’s lawyers vilely and baselessly accused me of using – stealing – money from George’s estate for the purchase. They made their brazen and offensive accusation despite having in their possession copies of all of George’s financial documents, clearly showing that George’s funds were untouched.
  • In December, I as executor received a letter of demand from the lawyers acting for Mum- her daughter Soei acting as her legal representative. Earlier in the year, a family gathering on Mum’s birthday in April was attended by six of her seven living children- Elizabeth being absent. All six unanimously supported Mum’s quest for the return of her money and agreed that Soei should act for Mum- she had been Mum’s unofficial attorney for the previous 18 years. In December, I immediately notified Katrina’s lawyers of Mum’s letter of demand; within eight weeks Katrina and Lindsay started a court action for my removal as executor.
  • In March 2005, knowing that her Auntie Soei was behind the Grandmother’s Claim, Katrina’ lawyers wrote a letter directly to Soei, bypassing her lawyers and threatening her with financial retribution if she continue the Grandmother’s Claim.
  • In April 2006 and undeterred by Katrina’s threat, Soei commenced formal proceedings to prosecute the Grandmother’s Claim. Within a few weeks, Elizabeth applied to the Supreme Court to remove Soei from being Mum’s legal representative and to replace her with the Protective Commissioner[8]; Katrina followed with an application to the Court to stop the Grandmother’s Claim. The same lawyers were acting for both Elizabeth and Katrina.
  • Elizabeth soon added an application for a Public Guardian to take over Mum’s care. Mum was already cared for in the Strathfield home that my wife and I had provided, with a comprehensive care plan that was approved by her specialist doctors. In essence, Elizabeth sought to place her own mother as ward of the State for no reasons other than to benefit Katrina by removing Soei and the rest of the family from Mum.
  • Mum was devastated; she plunged into deep depression and soon suffered a silent stroke followed by a fall. She was hospitalised after the fall. Despite Mum’s obvious deterioration especially after her fall, Elizabeth’s lawyers subjected Mum to two punishing medical examinations to prove that Mum’s family of five children conspired to take advantage of a demented old woman- the claim on conspiracy found no support from Mum’s own treating specialists, but of course Mum’s mental state had deteriorated after the stroke and a fall. Deeply depressed, Mum died in late December that year.
  • Before Mum died, my lawyers had effectively investigated the Reeves Claim and discovered it to be a bogus claim and a set-up to entrap me. I promptly applied to the court to have the Claim barred[9]. Katrina opposed my application- the only logical reason for such opposition was to keep the Reeves Claim alive, keep George’s estate protected, and to stop the executor from making any payment out of George’s estate to settle the Grandmother’s Claim. Associate Judge Macready dismissed her opposition and barred the Reeves Claim.
  • After Mum died, Katrina promptly sought an injunction[10] to stop my wife and me from selling our Strathfield home- where Mum had been staying. With the Reeves Claim gone and in the event I chose to settle the Grandmother’s Claim, they wanted the Strathfield property to remain available to them in the expectation of a successful compensation claim from me. The property was then worth around $1.7M. Judge Hamilton of the Supreme Court summarily dismissed Katrina’s application for an injunction.
  • Katrina immediately slapped a new claim against me in the Katrina Case, seeking compensation for $1.6M damages; she made the outrageous allegation that I had mismanaged the investment of her father’s funds because I had not invested all the funds in the share market!
  • Within a few days of Mum’s death and unbeknown to Soei and the rest of the family, Katrina’s lawyers put a caveat on Mum’s will to stop Soei from being appointed executrix (as nominated by Mum in her will); they did so to prevent Soei from pursuing the Grandmother’s Claim.
  • At law, such caveat operates for only six months and Katrina’s lawyers failed to realise the need for an extension. The court appointed Soei as executrix in November 2007 after Soei had made an innocently late application. In the following year, Elizabeth and Katrina’s lawyers continued to fight[11] to stop the now-official executrix from progressing the Grandmother’s Claim. Their efforts proved fruitless and costly- in June 2008 Associate Judge Macready ordered[12] the Grandmother’s Claim to proceed and it finally reached hearing in March 2009, two years and three months after mother had died.

The Trial of the Grandmother’s Claim

Since the claim was indefensible, I stood aside and left Katrina and Lindsay to take the conduct of defending their father’s estate in the Grandmother’s Claim. In his judgment, Judge Palmer stated that he had no doubt whatever over the evidence and confirmed the factual existence of Katrina’s Grandfather Property Trust dating back to 1976. He found George had breached his duty as trustee when he sold the trust property in 1996 and intermingled the money from the sale with his own assets (in blunt layman’s term, George stole the trust money). The Judge further found that George had breached his duty in not informing the life beneficiary, his Mum, of the existence of the trust. At the time of the judgment, Mum having already passed away, and Judge Palmer, relying on the written instruction given by Father to George, directed the trust money to go to an ongoing Grandfather’s Trust rather than to the Mum’s deceased estate. The Judge foreshadowed that, as the trustee of Grandfather’s Trust, I would need direction from the court on how to manage it; the trust money of course had first to be separated from George’s estate.

Part III- The Katrina Case against Me

The Lost Connection with the Recent Trial over the Grandmother’s Claim

Three months after the trial of the Grandmother’s Claimthe Katrina Case against me reached the same court for a hearing with Judge Palmer presiding. The court heard that the main issues in the Case was about Katrina wanting to remove and replace me as executor of her father’s estate because of some misconducts, about her claim of $1.7 million damages on allegation of misinvestment and about her recouping her legal costs from me.

At the start of their court proceedings four years earlier, Katrina relied firstly on my alleged misconduct over the Grandmother’s Claim in justifying her application to remove me as executor. She claimed compensation from me – they were unwilling to accept that at law I was trustee of the Grandfather Property Trust and that I held certain duties to the beneficiaries of that trust.

By the time we reached my trial in June 2009, they dropped any references to the Grandmother’s Claim- having lost in the trial three months earlier. The court did not get to hear of Katrina’s underlying fervent desire to punish me over her loss in the earlier trial. My defence team also failed to draw the court’s attention to the connection.

Background to My Trial

My barristers were unwilling to be on the offensive and they overlooked a large amount of Katrina’s false evidence. They adopted a purely defensive strategy, but they worked out my defence on their own with little input from me. At the start of the trial, I was assured that they had more than a threshold appreciation of the evidence and that they were well prepared for the trial. As the hearing proceeded, it became increasingly evident that my team was no match to the viciously adversarial approach of the plaintiffs.

The court heard that eight weeks before my trial was due to begin, I suffered an acute Meniere’s attack that completely destroyed the balance organs in my left ear. I was prostrated in St Vincent’s Private Hospital for two weeks and my treatments included an ear operation. Six weeks after discharge from the hospital and far from having recovered, I appeared in the trial of the Katrina Case; I did not present well as a witness. After one and half day in the witness box, I had to be excused with a relapse- two days later I was re-admitted to St Vincent’s. The court was adjourned.

The Issues

While I was in hospital, my lawyers persuaded me to resign as executor and to hand over George’s funds and their administration to Katrina, and I completed the act promptly afterwards. When the trial resumed in December, two issues remained for the court to resolve:  (a) Katrina’s allegation of misinvestment- that I should have invested all of her father’s funds in the share markets, and (b) Katrina’s continuing claim of some other misconduct on my part in order to ground her application for costs from me.

The misinvestment claim was self-evidently unmeritorious and mischievous. At law– a trustee is not under any duty to maximise the growth of funds under his management let alone by taking outrageous risks- his prime duty is to preserve the fund capital and secondly make it grow prudently. The facts heard by the court are: I had managed the investments of George’s funds under professional advice and according to proven market disciplines which include appropriate assets spread- ‘assets allocations’, and careful stock selection. In the trial, my management was lauded and supported by financial experts including Perpetual Trustees Limited; and indeed, as common sense would dictate, if I had invested my brother’s money fully in the share markets as Katrina’s lawyers alleged I should have done, his estate would have suffered massive losses following the global financial crisis and share market crash in 2007-8.

Despite the law and these obvious facts, Katrina’s lawyers were permitted to prosecute their unmeritorious claim right through to the second last day of the trial in 2009, when they withdrew the claim simply because they just could not justify let alone prove the numbers in their claim.  Katrina and her brother Lindsay were ordered to pay my costs in defending their misinvestment claim.

Essentially, the remaining issues at court relate to all the other costs relating to the drawn-out litigation. And these costs were driven by two strings of events where Katrina alleged misconduct on my part: the bogus medical negligence claim and the setting up of a George Tjiong Family Trust.

Imbalance of Evidence

The court was aware that virtually all of Katrina and Lindsay’s evidence were based on their memory and their supposed recall of events without the support of written notes or other record. In contrast, my evidence was based on a large collection of contemporaneous diary and file notes- as one would naturally expect from a person with professional background; I also relied on emails and other objective documents from third parties including hospital records, medical reports and the affidavits of two lawyers.

Before the trial, the gross imbalance of evidence favoured my position as defendant. Any trial judge would found that Katrina and Lindsay had no case against their well-meaning uncle. Worse still for Katrina, there were two documents embedded in the Austin Hospital record that undermined her memory evidence: (a) a report from a social worker describing Katrina as George’s estranged daughter, and (b) her hand-written efforts in making up her evidence over some events where self-evidently she held no memory- see below.

The Opening Battle- Destroying My Document Evidence and My Credibility

Read More

Richard Tjiong
Richard Tjiong

Richard Tjiong was involved with some bold but necessary – some say visionary – reforms: please see  Richard Tjiong – “The Centenary Speech” at http://grants-gov.com.au/richard-tjiong-the-centenary-speech-new-south-wales-medical-defence-union and “Medical Indemnity Reform” at http://richardtjiong.com.au. Though applauded by many in the industry and in the medical profession, these reforms were opposed by some sections of the law profession. In 2000-2003, the major parts of these reforms were implemented by state and commonwealth governments. Some aspects are still in need of attention. According to Richard Tjiong

The 1976 Trust was litigated in Chang v Tjiong & Ors [2009] NSWSC 122, where George’s sister Chang sought the return of the trust money to its rightfully beneficiary- their mother. Chang acted in her representative capacity at a time when her mother was 98 years old. The defendant was George’s deceased estate with Richard acting as the executor.

The Chang trial was heard by Judge Palmer in March 2004 and followed three months later by the hearing in the Katrina Case. After a two-day hearing of Chang v Tjiong & Ors in March, the Judge found that a trust had [indeed] been set up by George’s father in 1976, that George held the trust property as trustee and that George subsequently breached his duty as trustee by keeping the trust funds as his own property.

The judgment is reproduced in full from court record in Part II of this article.

 

 

Richard Tjiong

 

More on Richard Tjiong and trustee conduct.

Social Media Links

 
Richard Tjiong
Richard Tjiong
Richard Tjiong