Probate and Administration Act
1898
(NSW) s 86
o
Trustee cannot lend themselves money, even if powers under Trust are wide;
Wickstead v Browne
(1992) 30 NSWLR 1
o
Trustee cannot sell trust property to themselves either
;
Farrar v Farrars Ltd
1880
o
Essentially they
cannot partake in any activity
that might cause
concious and positive
wrongdoing
(including technical wrongs even if they acted in good faith
);
Holder v
Holder
[1968] Ch 353
g)
Duty to keep accounts and supply information
‘Whilst the defendant… has a fiduciary obligation to the plaintiff to provide information
as to the amount of the trust property and its investments….the
extent of that
obligation is affected by the circumstances of the relationship including the terms of
the contract between them
(the Trust deed);
Schmidt v Rosewood Trust
2003 UKPC 26
o
Trustee must keep
full/proper
accounts of trust property
;
Kemp v Burn
(1863)
o
Failure to render accounts when requested will make them liable to the cost of any
proceedings brought to obtain any account;
ibid
o
In complying with this duty, Trustee can employ professional accountants;
Clark v Inglis
(2010) 5 ASTLR 570
o
Trustee must provide beneficiaries with
full details of investments
including
evidence
verifying the investments + full information about
other trust property
;
Randall v
Lubrano
(2009) 72 NSWLR 621
Incl details of legal advice obtained to administer Trust;
Hawkesley v May
o
Trustees
do not
have to give beneficiaries access to their working papers;
Re Fairbairn
o
Beneficiaries’
rights are restricted to inspection
of
books/ records
– do not have access
to all records + cannot request Trustee’s reasons for exercising discretions
ibid
h)
Duty to act personally
o
Trustee must act personally (and unanimously if more than 1 trustee);
Luke v South
Kensington Hotel
(UNLESS trust allows majority decisions;
Dulhunty
[2010])
o
If 2+ trustees cannot agree, court can intervene;
Re Estate of William Just
(No 1)
1973
o
Trustee cannot delegate powers unless
specifically permitted by Trust Deed/Statute
OR it is a matter of necessity to employ an agent;
ibid
o
Power to delegate allows Trustee to delegate power to receive + hold moneys to a
bank;
Trustee Act 1925
(NSW) s 53
i)
Duty to consider
o
Trustee has duty to consider
how best to exercise their powers
and whether to
exercise them at all
o
They can seek the approval of the court but will end up surrendering their discretion by
doing so;
Marley v Mutual Security Merchant Bank
[1991] 3 All ER 198
o
If Trustee has obligation to exercise a power, court can compel them
o
If the power is a
mere power
the Trustee
must consider whether to exercise it at all
BUT this does not relieve the Trustee from duty to consider;
Re Hay’s Settlement
1982
o
Trustee is not obliged to disclose reasons for exercising discretion
o
When exercising a power of appointment they must act with good faith and sincerity
and not to effect any sinister purpose;
Duke of Portland v Lady Tophan
Any attempt to secure a benefit for themselves or someone else and not an
object of the power will breach this rule;
