Trustee misconduct will not be tolerated by Australian courts

In brief – Family trusts can be set aside if settlement procured by fraud

A recent decision of the NSW Court of Appeal in Tjiong v Tjiong demonstrates that trustee misconduct will not be tolerated and that Australian courts will be willing to set aside a family trust if the settlement has been procured by fraud.

Acrimonious litigation between trustee of family trust and its beneficiaries

A fabricated pilot's log book, a mysterious bag of cigarette butts, a dusty pocket diary unearthed from storage and a bogus claim of medical malpractice are not the components of a traditional trust dispute. But, in Tjiong v Tjiong [2012] NSWCA 201, each was a key piece of evidence in acrimonious litigation between the trustee of a family trust and the beneficiaries who accused him of fraud and misrepresentation.