New South Wales – Australia – The Court considered the ‘right’ of the ‘beneficiary’ of a discretionary trust to inspect a memorandum of wishes provided by the instigator of the trust.
Held: Mahoney JA expressed some doubt as to the existence of a duty on a discretionary trustee to provide information on the trust to potential beneficiaries.
Mahoney JA said: ‘[I]f a beneficiary requests it, a trustee is in general obliged to provide documents and information to the beneficiary, at his cost, in relation to the trust property and to provide an accounting in respect of the administration of it.’
Kirby P, dissenting said as to the interpretation of trust documents: ‘These were defined, with an unmistakable element of circulatory, as being the documents in the possession of the trustees, as trustees, containing information about the trust ‘which the beneficiaries are entitled to know’ and in which they thus have a proprietary interest: see Ibid (at 938). This rather unilluminating circularity has been quoted and requoted in many cases since as if it provided a solution to the definition of the documents to which beneficiaries are entitled, and not entitled, to have access. Of course, it does not. It states, rather than solves, the problem of the documents to which access might be had by beneficiaries, as of right, against reluctant trustees.’
Sheller JA said: ‘With respect to the conclusion in Re Londonderry’s Settlement I think material upon which reasons were or might have been based cannot generally be withheld, unless it reveals the reasons themselves or the reasoning process. In Jacobs’ Law of Trusts in Australia, . . referring to the Londonderry’s Settlement case the learned authors say: ‘Nevertheless, this case is clear authority that beneficiaries have no right to see documents private to the trustees which may evidence the reasons why the trustees have made their decisions.’
This statement, in my opinion, accurately describes the nature of documents access to which by beneficiaries is denied.’
Judges:
Mahoney JA, Kirby P, Sheller JA
Citations:
(1992) 29 NSWLR 405
Jurisdiction:
Australia
Trusts
Updated: 04 May 2022; Ref: scu.556391