Wright v Stevens

Background Facts

1. An analysis of the legal issues, to be more meaningful, requires a general overview of the surrounding facts and the events giving rise to the Plaintiff's claim. The following facts are not the subject of any dispute (to the extent that they are identified in Ex. B), or are clearly established, otherwise, by the uncontested evidence of the Plaintiff and/or of Mr Hinchcliffe.
2. The deceased lived in Dorrigo, New South Wales. He was a well-known Dorrigo identity. He died on 6 November 2007. He was never married, and, so far as is known, he had no children. He had no other next of kin (entitled to his estate by operation of the intestacy rules that applied at the date of the deceased's death).
3. The deceased left a duly executed Will that he made on 29 October 2007 (shortly before his death). It appointed "the solicitors at the date of my death of the firm Barwick Stevens Lawyers to be one of my joint executors and direct[ed] that only one of them need prove the will and act initially in respect of its Trusts" and "my accountant Timothy John Christiansen": Clause 2 of the Will.
4. On 17 April 2008, this Court granted Probate of the deceased's Will to the first Defendant, who is a solicitor at the firm Barwick Stevens Lawyers, and to Timothy John Christiansen. I shall return to the other relevant terms of the Will later in these reasons.
5. Mr Christiansen retired as a trustee of the Trust on about 14 August 2013. (Any document that related to his retirement is not in evidence.) Since then, and currently, the first Defendant has remained the sole trustee of the Trust.
6. In the Inventory of Property, a copy of which was attached to, and placed inside, the Probate document, the deceased's estate was disclosed as having an estimated, or known, value of $5,540,921 (which appears to be incorrect). The estate was said to consist of real property ($4,790,000), as well as cash at bank, and personalty (in total $475,921). (When calculating the total of the estimates or known values of the property disclosed in the Inventory of Property, the actual estimated total value of the estate was $5,265,921.)
7. The nature, or value, of the deceased's estate, at the date of hearing, was not disclosed in the evidence. There is no evidence about whether the estate has been fully administered. (The Court was informed by senior counsel for the first Defendant, from the bar Table, that the estate of the deceased has been fully administered However, that is not an agreed, or an otherwise established, fact: T2.17 - T2.23.) There is also no evidence that the first Defendant has verified, filed, and passed, any accounts, relating to the estate: T20.00 - T20.05.

The Terms of the deceased's Will

1. No party disputed that the deceased's Will was, at least in part, a badly drafted document. A reference to a "Trust Deed", several times, demonstrates that it is unnecessary to say more. There was, of course, no Trust Deed. However, the First Schedule to the Will, comprising some 22 pages, set out the terms of the testamentary Trust.
2. Clause 4 of the Will provided a gift of "the whole of my estate of whatsoever kind and wheresoever situate, after payment of all due debts and testamentary expenses, to my trustees UPON TRUST, as set out in the Schedules to this my Will".
3. Clause 5 of the Will directed that "the said trust be a discretionary trust in memory of my parents, George and Annie Cork".
4. Clause 6 of the Will gave the Trustees powers "in addition to those powers as set out in the Trust Deed": "(a) To sell, lease, exchange or otherwise dispose of assets in [the] estate on such terms as the Trustee considers expedient as though the Trustee were the absolute beneficial owner thereof; (b) To carry on … any business which [the deceased] was engaged as at the date of … death, and to employ … [people] upon such terms and conditions as the Trustee shall think fit and generally to act in all respects in relation to such business as if the Trustee where [sic] the absolute owner thereof and [directed] that the Trustee shall not be liable for any loss occasioned by the carrying on of the said business…; (c) To call in and convert to money such part or parts of [the] estate and property as may not consist of money; and (d) To amend the Trust Deed to comply with the Australian Taxation laws from time to time and to apply to the Australian Taxation Office for charitable status when and if required".
5. Before referring to the terms of the First Schedule, I shall refer to the Second Schedule of the Will because it is short and what follows, thereafter, will be more comprehensible.
6. Item 1 of the Second Schedule to the Will, identified "Barwick Stevens Lawyers" and Timothy John Christiansen as the first Trustee.
7. Item 2 of Schedule 2 provided that: "The Beneficiary or Beneficiaries referred to in Clause 1.3 of the First Schedule is or are: Such persons, Trustees of Trusts (but excluding any Trusts which would result in a breach of the rule against perpetuities or the rule against accumulations) companies or charities, residing in or otherwise carrying on business in Dorrigo in New South Wales or surrounding areas as defined by the postcode 2453 as the Trustees shall before the vesting date appoint in writing to be beneficiaries for the purposes of this Deed."

Additional Undisputed Facts

1. The Plaintiff is not a specifically named beneficiary of the Trust. However, he is a person who is a resident living within the Dorrigo postcode area 2453. He has lived within the Dorrigo postcode area since 1999. Before that, he was a farmer engaged in business within the postcode area for about 40 years. He is a retired Fellow of the Securities Institute of Australia and a former member of the Sydney Stock Exchange and the Australian Stock Exchange. He has been a member of the Grafton Rural Lands Protection Board.
2. In the circumstances, the Plaintiff is a person with a genuine legitimate expectation of benefitting from the Trust as one of the "persons" whom the first Defendant, as Trustee, is bound to have in mind when exercising the discretion to appoint "a person" in writing to be a Beneficiary for the purposes of the Trust.
3. A person who is also not a named beneficiary of the Trust, but who has been living within the Dorrigo post code area since 1994, is Mr Hinchcliffe, a retired accountant and business analyst (and formerly a management accountant): T2.45 - T3.04. He is not a party, but, as stated, a witness in the proceedings.
4. The Plaintiff met with the first Defendant and Mr Christiansen at the first Defendant's office, on 15 April 2014 where they had a conversation about the administration of the Trust.
5. The Plaintiff called a public meeting in Dorrigo on 28 May 2014 at which about 80 people, including the Plaintiff and Mr Hinchcliffe, attended. Subsequently, the Plaintiff wrote a letter, dated 29 May 2014, to the first Defendant referring to the public meeting and what, he said, had occurred thereat. He requested a response to the letter from the first Defendant but he received no reply.
6. The Plaintiff sent an open letter, addressed to the first Defendant, which was published in the Don Dorrigo Gazette of 4 June 2014. Also published in the same edition of the newspaper, was a letter to the Editor, from Mr Christiansen, and a series of questions about the Trust that had been posed to, and the answers said to have been given by the first Defendant.
7. Mr Christiansen's letter prompted a lengthy letter from the Plaintiff to the editor of the newspaper and an "open letter" to the editor from Mr Hinchcliffe, both of which letters were published on 18 June 2014. A further letter to the editor, from the Plaintiff, was published on 6 August 2014.

The Plaintiff's Submissions

1. By way of introduction, it was pointed out, in the Plaintiff's written Submissions, that the Plaintiff does not challenge the validity of the Trust; that he "does not (nor could he) say anything about whether the Trust instrument is valid as a private trust"; that he brings the proceedings upon the basis that the Will establishes a private discretionary trust; and that he "neither supports nor opposes the position taken by" the second Defendant.
2. In Submissions in reply, counsel for the Plaintiff wrote: "The Plaintiff has brought these proceedings because of concerns about the due administration of the trust … at substantial cost and risk sought in the public interest to bring these concerns to the attention of the Court".
3. Whilst the submissions go on to point out the concerns of the Plaintiff regarding the administration of the Trust, it is not necessary to repeat all of these concerns, since there is no person seeking to remove the first Defendant as the trustee of the Trust. The Amended Summons does not seek any relief consequent upon establishing the validity of those concerns. In addition, that was not an issue for consideration identified by the parties. It is sufficient to say that there are concerns, which, on proper investigation, may, or may not, be real.
4. I shall quote, verbatim, the thrust of the Plaintiff's written submissions: "17. The central contention of the Plaintiff is that on the proper construction of the Will of the Deceased, and the Trust constituted by that Will, the Trustee has extensive powers of investment and management, but those powers must be exercised in furtherance of the expressed trusts and obligations relating to the application and appropriation of Trust Funds to a Beneficiary. 18. Appointment as a Beneficiary is the gateway to the distribution of benefits under the Trust. The accounting information maintained by the Trust does not appear to provide any separate accounting in respect of 'grants' that have been made to date, and does not disclose whether or not any Beneficiaries are in existence. If there is no accounting under these proceedings, and there are no Beneficiaries, there is no other basis on which the Court may supervise the administration of the Trust, assuming it to be a valid private trust. 19. The plaintiff contends that on the proper construction of the trust instrument, the Trustee may deal with the assets of the Trust Fund, but may not make donations or grants from the Fund otherwise than to persons or entities who have been appointed as Beneficiaries. The grants by the Trustee to community groups and unincorporated organisations must be supported, to be authorised by the Trust instrument, by written appointments or memoranda of appointments as a Beneficiary. The accounts must therefore reflect the distinction between the exercise of powers of management, and the exercise of powers of appointment. There is no indication that the accounts do disclose this separate treatment."

The second Defendant's Submissions

1. I shall deal next with the submissions of the second Defendant before turning to the first Defendant's submissions in response to the submissions.
2. It was pointed out that the Plaintiff and the first Defendant had conducted the case on the shared premise that the Trust was a private discretionary trust. The second Defendant, who, it was said, "rarely files a pleading in such matters", had filed the Cross Summons, at the request of the Court, so that the private discretionary trust analysis could be contradicted, and a "third way" could appear on the pleadings.
3. In oral submissions, counsel for the second Defendant accepted that if the Court came to the conclusion that the Trust was not a charitable trust, then the claim advanced in the Cross-Claim failed: T55.00 - T55.08.
4. The second Defendant joined with the Plaintiff in raising concerns surrounding the administration of the Trust. Counsel pointed to: 1. A poorly drafted testamentary trust instrument constituted by the Schedules to the deceased's Will. 2. Assets with a substantial value, held by the first Defendant as co-trustee since Probate on 17 April 2008; and as sole Trustee since 14 August 2013. 3. That there was no evidence that a Beneficiary has, or Beneficiaries have, ever been formally appointed ("appointed in writing"). Prima facie, it was said, the evidence suggested that Trust funds have been applied to persons who, or entities which, may, or may not, be within the class of objects prescribed by the Second Schedule Item 2. 4. The concerns about the proper administration of the Trust have been expressed by the Plaintiff and by Mr Hinchcliffe, both of whom fall within the class of potential discretionary objects. 5. The Plaintiff had no greater right to be considered than any other member of the class of objects, being "persons, Trustee of Trusts… companies or charities residing in or otherwise carrying on business in Dorrigo… or surrounding areas as defined by postcode 2458". (However, he did have that right.)
5. Counsel raised the possibility that the potential objects of the Trust, as expressed in Second Schedule, Item 2, may be subject to "criterion uncertainty" or may fail the "loose class" or "administrative workability" criterion in McPhail v Doulton [1971] AC 424; T75.14 - T75.32.
6. Counsel then submitted that if the Plaintiff, as a person residing within the Dorrigo 2453 postcode, cannot enforce the Trust, then nobody could, with the result that the Trust would then fail, since one test of the validity of a trust is that it must be of such a nature that it can be administered by a court.

The first Defendant's Submissions

1. The first Defendant began by dealing with the arguments of the second Defendant.
2. It was submitted that it was not necessary to descend into the issue of whether there was a charitable trust (or general charitable purpose) because when one considered when the Trust first became operative, it would not have been considered to be invalid. In particular, it was submitted that there was no uncertainty as to the Trust's objects and that uncertainty did not arise merely because in advance of distribution the beneficiaries were not identified: Kinsela v Caldwell (1975) 132 CLR 458, at 461; [1975] HCA 10.
3. Nor could there be uncertainty about whether a person was, or was not, a member of the class of persons who may be appointed to be a Beneficiary because the definition of "Beneficiary" in the Second Schedule, Item 2, looked to the eligibility of a particular person or entity by reference to objectively applicable criteria. It was put that, in other areas of law, the place of residence, or the place of business, is each a readily understood concept to apply. If the Plaintiff (or any other potential object) had an appropriate residence, or place of business, there was no administrative unworkability in relation to the application of that criterion.
4. Alternatively, the first Defendant submitted that there was no charitable trust (or general charitable purpose) in the Schedules to the Will of the deceased because the objects of the Trust, gleaned from the terms of the Schedules to the Will and, in particular, the Second Schedule, Item 2, made it clear that, regardless of how beneficial the exercise of powers in appointing, and then exercising the discretion to provide funds to charities in Dorrigo, such objects were not peculiarly within one, or more, of the four categories, described in the Statute of Charitable Uses 1601 (43 Eliz 1 c 4): namely, the relief of poverty; the advancement of education; the advancement of religion; and other purposes beneficial to the community not falling under any of the preceding headings.
5. Importantly, the first three categories could have no application because the objects are persons, trustees of trusts, companies or charities "residing in or otherwise carrying on business in Dorrigo", which implies a private or business purpose. There was no necessary requirement of general public utility of the Trust to satisfy the fourth category of "other purposes beneficial to the community".

The Determination of the Issues

1. I shall next deal with the issues identified by the parties and express the answers to the questions posed.

Should the George and Annie Cork Trust be construed as a charitable trust or a private discretionary trust or is it invalid?

1. This question involves some basic questions as to whether a trust of any kind was validly constituted and, if so, on what terms. In determining the answer, it is necessary to construe the terms of the deceased's Will and the First and Second Schedules to the Will. (None of the parties suggested that there was evidence extrinsic to the Will that should be admitted to assist in interpretation of the language used in the Will.) There was no dispute that the principles for construction of a testamentary trust are those for the construction of a will.
2. In Towns v Wentworth [1858] 11 Moo PC 526, at 542-543; (1858) 14 ER 794, at 800: "The rules of construction … do not seem open to any doubt. In order to determine the meaning of a Will, the Court must read the language of the Testator in the sense which it appears he himself attached to the expressions which he has used, with this qualification, that when a rule of law has affixed a certain determinate meaning to technical expressions, that meaning must be given to them, unless the testator has by his Will excluded, beyond all doubt, such construction. When the main purpose and intention of the Testator are ascertained to the satisfaction of the Court, if particular expressions are found in the Will which are inconsistent with such intention, though not sufficient to control it, or which indicate an intention which the law will not permit to take effect, such expressions must be discarded or modified; and, on the other hand, if the Will shows that the Testator must necessarily have intended an interest to be given which there are no words in the will expressly to devise, the Court is to supply the defect by implication, and thus to mould the language of the Testator, so as to carry into effect, as far as possible, the intention which it is of opinion that the testator has on the whole Will, sufficiently declared. The application of these rules is often attended with very great difficulty, as the number of cases found in the books upon the subject, not always very easily reconcilable with each other, sufficiently testifies …
3. The principles were also conveniently set out by Isaacs J in Fell v Fell (1922) 31 CLR 268, at 273-276; [1922] HCA 55. Relevantly, they included the following: "(1) 'Every will must by law be in writing, and it is a necessary consequence of that law that the meaning must be discovered from the writing itself, aided only by such extrinsic evidence, as is necessary in order to enable us to understand the words which the testator has used'. (2) 'The instrument … must receive a construction according to the plain meaning of the words and sentences therein contained. But … you must look at the whole instrument, and, inasmuch as there may be inaccuracy and inconsistency, you must, if you can, ascertain what is the meaning of the instrument taken as a whole in order to give effect, if it be possible to do so, to the intention of the framer of it.'" (Omitting citations)

If the Trust is a charitable trust, is it necessary to settle an administrative or cy-près scheme?

1. It is not necessary to determine this question in light of the conclusion that the Trust is not a charitable trust.

If an administrative or cy-près scheme should be settled, what are the terms on which that should occur?

1. It is not necessary to determine this question in light of the conclusion that the Trust is not a charitable trust.

If the Trust is a private discretionary trust, is the Plaintiff eligible to be appointed as a Beneficiary within the terms of Schedule 2 Item 2 of the Will?

1. As there is no dispute that the Plaintiff is a "person…residing in Dorrigo in New South Wales or surrounding area as defined by post code 2453", he is eligible to be appointed in writing as a Beneficiary within the terms of the Second Schedule Item 2.
2. This conclusion, however, does not mean any more than that the Plaintiff is a discretionary object, who, before the vesting date, has the right to be considered by the Trustee to be appointed, in writing, by her, as a "Beneficiary" for the purposes of the Trust. In other words, he is an object of a bare power of appointment.
3. Importantly, the conclusion also does not mean that he is a "Beneficiary" (or a beneficiary in the traditional sense of that word) of the Trust. Having a mere hope, or expectation, that an appointment as a Beneficiary would be made in his favour, does not mean that the Plaintiff has any interest in the Trust. Indeed, it is clear that "the object of a bare power of appointment out of assets has no proprietary interest in those assets, but only has a mere expectancy or hope that one day the power will be exercised in that object's favour": Jacobs' Law of Trusts in Australia at 41 [3-14] and 569 [23-15]; and see, Gartside v Inland Revenue Commissioners at 607. In this regard, he may be called "an eligible object" of the Trust.
4. Only after the appointment in writing by the first Defendant, as a Beneficiary, would the Plaintiff become a discretionary object, with no more than an equal right, with any other discretionary object so appointed, to be considered by the Trustee, as a potential recipient of distributions from the Trust, or be entitled to annual income (or capital on the vesting date) in default of application or payment.
5. There is no evidence that the Plaintiff has, in fact, been so appointed. It is when he is so appointed, in writing, that the Plaintiff becomes a member of a class ("the Beneficiaries") and is then the object of a trust power in the Trustee to appoint either, or both, income or capital, and to do so, periodically, between those members who are selected from the designated class on each such occasion, but reserving in the Trustee a discretion as to the quantum of income, or capital, appointed or paid to any particular Beneficiary and a discretion to declare the exercise of the power on any occasion.

What test should the Court apply to determine whether the Plaintiff has (as a person eligible to be appointed as a Beneficiary) an entitlement to access to the documents sought in the Amended Summons?

1. The Australian position on whether a discretionary object has an entitlement to access documents remains unsettled.
2. In AIT Investment Group Pty Ltd v Markham Property Fund No 2 Pty Limited, at [66], Bergin CJ in Eq noted that there are "two streams of authority". The first stream has been called the "proprietary approach": Deutsch v Trumble [2016] VSC 263, at [46]. The proprietary approach was adopted by Lord Wrenbury in O'Rourke v Darbishire [1920] AC 581, who wrote, at 626-627: "The beneficiary is entitled to see all trust documents because they are trust documents and because he is a beneficiary. They are in a sense his own."
3. In the subsequent case of Re Londonderry's Settlement, a decision of the Court of Appeal of England and Wales, Salmon LJ found, at 937, that beneficiaries have a proprietary interest in, and right to see, all trust documents. He went on to write, at 938: "The category of trust documents has never been comprehensively defined. Trust documents have these characteristics in common: (1) they are documents in the possession of the trustees as trustees; (2) they contain information about the trust which the beneficiaries are entitled to know; (3) the beneficiaries have a proprietary interest in the documents and, accordingly, are entitled to see them. If any parts of a trust document contain information which the beneficiaries are not entitled to know, I doubt whether such parts can truly be said to be integral parts of a trust document."
4. The other stream that has been considered is the "discretionary approach", which has been adopted by the Privy Council in Schmidt v Rosewood Trust Ltd. The discretionary approach considers that an order to disclose trust documents is one aspect of the Court's inherent jurisdiction to supervise, and if necessary intervene in, the administration of trusts, however, such an order for access to documents will depend on the Court's discretion: at [51].
5. Whether the right of inspection of trust documents arises in some cases because the discretionary object has an equitable proprietary right or interest in trust documents, or whether it rests upon the exercise of a discretion based upon the fiduciary duty of a trustee to keep the discretionary object informed when requested to do so, and to render accounts, was the subject of dispute by the parties, and so it would seem, not entirely clear from the authorities.

If the correct test requires that the Court must be satisfied the Plaintiff has a proprietary interest in the Trust assets, what is his entitlement, if any, to access the documents sought in the Amended Summons?

1. I do not consider that the Court must be satisfied the Plaintiff has a proprietary interest in the Trust assets. It is accordingly, unnecessary to answer this question.

If the correct test requires that the Court has a discretion to grant or withhold access, should the discretion be exercised in favour of the Plaintiff?

1. In Rouse v IOOF Australia Trustees Limited (1999) 73 SASR 484; [1999] SASC 181, at [100] - [101], the Court of Appeal wrote about the discretionary considerations: "There must be various situations in which a trustee, particularly a trustee conducting a business, would be put in an impossible position if the beneficiary of the trust could, as a matter of right, claim to inspect documents in the possession of the trustee and relevant to the conduct of the business. It is readily conceivable that there will be situations in which an undertaking of confidentiality is not sufficient protection. The fact that the trust is one in which numerous beneficiaries have an interest, and the further fact that those beneficiaries may have differing views about the wisdom of the course of action being pursued by the trustee, only serve to emphasise, in my opinion, the need for the law to recognise some scope for a trustee to refuse to disclose information on the grounds that it is confidential and on the further ground that the disclosure is not in the interests of the beneficiaries as a whole… Ultimately, I would rest the existence of the relevant discretion upon the need to reconcile the undoubted duty of a trustee to make disclosure to beneficiaries of information about the trust, and the undoubted duty to permit the inspection of trust accounts and trust documents, with the equally fundamental obligation of a trustee to conduct the affairs of a trust, and particularly a trust which involves the conduct or management of a business, in the interests of the beneficiaries as a whole. I consider that on occasions the reconciliation of these interests may entitle a trustee to decline to provide information to particular beneficiaries, when the trustee has reasonable grounds for considering that to do so will not be in the interests of the beneficiaries as a whole, and will be prejudicial to the ability of the trustee to discharge its obligations under the trust…"
2. Mahoney JA, in Hartigan Nominees v Rydge, at 436, wrote that it was important in resolving that case to have regard to "the essential nature of ... discretionary trust[s] [which] ... is not a mere commercial document in which the public may have an interest [but] ... is a private transaction, a disposition by the settlor of his own property, ordinarily voluntarily, in the manner which he is entitled to choose [and] [s]pecial cases apart, it is proper that his wishes and his privacy be respected." Sheller JA, at 442, expressed similar concerns.

What is his entitlement to access the documents sought in the Amended Summons and to which documents?

1. In answering this question, I cannot do better than refer to what was written by J C Campbell, whilst a judge of the Court of Appeal of the Supreme Court of New South Wales and a Visiting Fellow of Wolfson College, Cambridge, in an article headed "Access by trust beneficiaries to trustees' documents information and reasons", in (2009) 3 J Eq 97, at 108 - 110: "Extent of information required to be disclosed The duty to account relates to the provision of information, not merely of such information as happens to exist in writing. In Clarke v Earl of Ormonde the way Lord Eldon explained the rights of the Marquis during his life was in terms of an entitlement to have questions answered. Similarly in Walker v Symonds, Lord Eldon said: 'It is the duty of trustees to afford to their cestui que trust accurate information of disposition of the trust-fund; all the information of which they are, or ought to be in possession: a trustee may involve himself in serious difficulty, by want of the information which it was his duty to obtain.' Similarly in Ottley v Gilby Lord Langdale MR said: 'a legatee has a clear right to have a satisfactory explanation of the state of the testator's assets, and an inspection of the accounts, but he has no right to require a copy of the accounts at the expense of the estate.' The 'satisfactory explanation' is a separate thing to the inspection of the accounts. Holland J in Randall v Lubrano, Powell J in Spellson v George and Hodgson J in Janango, all accepted that the potential object of the power had a right to information, as well as to documents. Several cases have decided that a beneficiary is entitled to see cases for opinion of counsel, and advices of counsel, that were obtained by a trustee in administering the trust, though not cases for opinion and advices that the trustee obtained for the purpose of defending his own position, once it was known that an allegation that he had breached the trust was being made against him. The right of a beneficiary to receive information concerning the trust is not merely a right to be provided with what are said to be statements of fact concerning the trust assets and dealings. As well, cases have held that a beneficiary is entitled to a degree of proof that the information that has been given is correct. Thus, in Clarke v Earl of Ormonde Lord Eldon held that the successors in title of the Marquis were entitled to not only have a set of accounts produced to them, but also to have an inspection of 'the vouchers' - which I take to mean documentary proof of the individual transactions that were summarised in the accounts. Similarly in In Re Tillott Chitty J said: 'a trustee is bound to give his cestui que trust proper information as to the investment of the trust estate, and where the trust estate is invested on mortgage, it is not sufficient for the trustee merely to say, 'I have invested the trust money on a mortgage', but he must produce the mortgage deeds, so that the cestui que trust may thereby ascertain that the trustee's statement is correct, and that the trust estate is so invested. The general rule, then, is what I have stated, that the trustee must give information to his cestui que trust as to the investment of the trust estate. Where a portion of the trust estate is invested in Consols, it is not sufficient for the trustee merely to say that it is so invested, but his cestui que trust is entitled to an authority from the trustee to enable him to make proper application to the Bank, as has been done in this case, in order that he may verify the trustee's own statement; there may be stock standing in the name of a person who admits he is a trustee of it, which at the same time is incumbered, some other person having a paramount title may have obtained a charging order on the stock or placed a distringas upon it.' In that case the plaintiff, who had a one-twelfth interest in remainder subject to a life estate in a trust fund that was invested in consols, was held entitled to have the trustee sign an authority enabling the plaintiff to ascertain the amount of the consols held by the estate and any encumbrances on those consols. The trustees had opposed that order on the basis that granting it would enable the plaintiff to ascertain information as to the dealings of the other cestui que trust with their shares, and that even if the other cestui que trust had encumbered their shares that would not affect the plaintiff's interest in the consols. Chitty J made such an order, even though there was no suggestion that the trustee's statement was incorrect. Chitty J continued: 'that the cestui que trust is entitled to the further information that he now asks for, which will enable him to go back with an authority from the trustee, on which the bank will shew that the fund is either clear of all distringases and the like or that it is not. I quite agree with what fell from counsel for the defendant that this may give the plaintiff more information than he is entitled to ask, because as there are twelve shares in this fund, it may be that there are several distringases on the fund obtained by persons who have charges on the contingent interest of the other persons, and it is clear that the trustee is not bound to give the cestui que trust of one share any information as to the dealings of the other cestui que trust in whose share he has no interest, shewing whether those shares are or are not incumbranced. I think, then, for these reasons, that there ought to be a further order in the terms the plaintiff asks for, but the plaintiff must pay the costs of the motion.' That initially puzzling statement might, perhaps, be justified on the basis that, if the plaintiff could be fully informed concerning his own interest in the trust fund only by adopting a course of action that incidentally involved disclosing matters relating to the interests of other beneficiaries in the trust fund, it was necessary for the information relating to the other beneficiaries to be disclosed. Even if that is the correct explanation, the decision on costs seems strange."

What conditions, if any, should be imposed on the Plaintiff's access to or use of the documents?

1. I am prepared to hear the parties on the conditions, if any, that should be imposed on the Plaintiff's access to or use of the documents. If the documents are limited to those sought in the Amended Summons, it is difficult to see why conditions should be imposed, but, as sought by the first Defendant, I shall allow the parties to discuss this aspect and try to reach agreement.
2. I shall stand the matter over to a date convenient to the Court and to the parties following the delivery of these reasons.

Who may currently enforce the Trust?

1. Had I found that the Trust was a charitable trust, at general law, the second Defendant, the Attorney-General of New South Wales, is "the proper and ... the only competent party to protect the charitable trusts and to seek to enforce them and to look after the interests of the public in those trusts": Ku‑ring‑gai Municipal Council v The Attorney‑General (1954) 55 SR (NSW) 65, at 69‑70.
2. Since I have not made that finding, nothing else need be said about it.
3. The question, then, is answered, in part, by what was written by the High Court in CPT Custodian Pty Ltd v Commissioner of State Revenue at [17], approving the statement in Schmidt v Rosewood Trust Ltd, that: "the right to seek the intervention of a court of equity to exercise its inherent authority to supervise and, if necessary, to intervene in the administration of trusts, 'does not depend on entitlement to a fixed and transmissible beneficial interest'."
4. In the circumstances, any of the discretionary objects could seek the intervention of the Court, assuming that there was a proper basis for that application.

Can the class of objects stated in Schedule 2 Item 2 be identified independently of the exercise of the trustee's discretion?

1. In my view, for the reasons expressed earlier, the class of objects identified in the Will, can be identified as such persons, Trustees of Trusts (but excluding any Trusts which would result in a breach of the rule against perpetuities or the rule against accumulations) companies or charities, residing in or otherwise carrying on business in Dorrigo in New South Wales or surrounding areas as defined by the postcode 2453 as the Trustees shall before the vesting date appoint in writing to be beneficiaries for the purposes of the Will.
2. However, as also stated earlier, none of the class becomes a "Beneficiary" until the first Defendant appoints in writing any member of the class to be a "Beneficiary" for the purposes of the Will.

Is the Plaintiff entitled to an order for accounts?

1. In Chaine-Nickson v Bank of Ireland [1976] IR 393, the trustees of a discretionary trust refused to render accounts of the trust property to the plaintiff who was a potential beneficiary. The trustees were ordered by the High Court to render such accounts but no question was ever raised that they might be removed as such trustees by reason of their unwarranted refusal to render accounts.
2. In Hancock v Rinehart [2015] NSWSC 646, it was said, at [338] - [340]: "The plaintiffs seek orders for the taking of an account of the Trust, in common form. A plaintiff who seeks the remedy of an account must prove that the defendant is an accounting party, and that the plaintiff is entitled to some (uncertain) sum from the defendant [Juul v Northey [2010] NSWCA 211, [185]; Mulherin v Quinn Villages Pty Ltd [2007] QSC 231; Re Sharpe (unreported, FCA, Drummond J, 11 December 1992), [5]; Meagher, Gummow & Lehane, Equity Doctrines and Remedies 4th ed (2002) LexisNexis (at [25-025]), citing Doss v Doss (1843) 3 Moo Ind App 175, 196-7; 18 ER 464, 472 (Dr Lushington)]. In the relation of trustee and beneficiary, the trustee is an accounting party. It is a fundamental obligation of a trustee to keep and render to the beneficiaries a full and candid record of their stewardship, including all appropriate financial accounts [Burrows v Walls (1855) 5 De G M & G 233; 43 ER 859, 866 (Cranworth LC); Low v Bouverie [1891] 3 Ch 82, 99 (Lindley LJ); Armitage v Nourse [1998] Ch 241, 261 (Millett LJ); Waterhouse v Waterhouse (1998) 46 NSWLR 449, 494 (Windeyer J)]. That duty to account encompasses a duty to keep records, a duty to report to the beneficiaries and/or the court, and a duty to pay amounts the trustee is obliged to pay to the beneficiaries [Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26, [42]]. Except where an account on the wilful default basis is sought - and it is not sought here - a beneficiary's entitlement to an account does not depend on alleging or establishing any default or breach of trust. As Powell J (as he then was) put it in Spellson v George (1987) 11 NSWLR 300 (at 315-316): 'This being the essential nature of the position of a trustee, and the liability to account being an essential ingredient in it, it seems to me that it is inescapable that the cestuis que trust, or any one of the cestuis que trust, have, or has, a correlative right to approach the Court for its assistance in enforcing the personal obligation of the trustee, and, in particular, in enforcing the trustee's obligation to account. Since that right is, as it seems to me, a fundamental right of the cestuis que trust, or of a cestui que trust, it seems to me that it is not correct to say that its enforcement by the court is dependent upon the cestuis que trust, or the cestui que trust in question, first raising an allegation, or establishing a prima facie case, of fraud or some other like breach of trust. On the contrary, so it seems to me, where the court's assistance in enforcing the trustee's obligation to account is invoked, the court should be concerned with only two questions, they being, first, whether the plaintiffs are, or the plaintiff is one of the, cestuis que trust, and, second, whether the defendant trustee has failed to observe his obligation to account.'"

Does UCPR rule 54 provide a basis for relief

1. UCPR rule 54 is instructive in providing an answer to the question. The rule allows for proceedings to be brought for "any relief which could be granted in administration proceedings": UCPR r 54.3(1). The term "administration proceedings" is defined to mean "proceedings for the administration of an estate, or for the execution of a trust, under the direction of the Supreme Court": UCPR rule 54.1.
2. Relevantly, the rule also provides that proceedings may be brought for "the determination of any question which could be determined in administration proceedings": rule 54.3(2). (The rule then provides a list of questions that the Court may determine, although, this list is not exhaustive.)
3. Also relevant, UCPR r 54.3(3) provides: "54.3 Relief without general administration (3) Proceedings may be brought for an order directing any executor, administrator or trustee: (a) to furnish accounts, or (b) to verify accounts, or (c) to pay funds of the estate or trust into court, or (d) to do or abstain from doing any act."
4. UCPR rule 54.3(4)(c) includes proceedings that could be brought for "directing any act to be done in the execution of a trust that the Supreme Court could order to be done if the trust were being executed under the direction of the Court".
5. This sub-rule does not expressly limit who may bring the application for an order directing the executor, administrator or trustee. One can also see that the language of the rule, referring as it does to "any relief" and "any question", is extremely broad.
6. In Re Estate Schwartz, Deceased; Application of Gellert; Gellert v Bentwood and Schwartz [2015] NSWSC 1484, at [12], Lindsay J described UCPR rule 54 as a "procedural expedient" that is "designed to provide [a] summary, cost-effective alternative to an application for general administration of a trust by the Court".
7. In Stamoulos v Constantinidis; Constantinidis v Constantinidis [2017] NSWSC 1808, at [50] - [52], Parker J in discussing the rule, stated: "Under UCPR Pt 54, the Court has power to grant relief of the type which could formerly have been granted in what were known as administration proceedings. The Court has wide powers to direct acts to be done in the administration of the estate and to determine questions arising in the administration of the estate, including questions as to the rights or interests of a person who claims to be a creditor of the estate: r 54.3(2)(c). These powers are amply wide enough to ensure that the interests of the estate can be protected. But, of course, the making of such orders is not a matter of right on the part of the beneficiary who applies for them. Ultimately, it is a matter for the Court to consider whether the orders should be made and, in doing so, the Court will take into account such questions as to the strength of potential claims or arguments available to the estate as against creditors or other third parties, and other practical questions such as the degree of likely recovery. UCPR Pt 54 also contains specific rules directed towards the provision of accounts by executors or others: r 54.3(3)(a). But, again, these are not matters of right and it is always a matter for the Court as to whether it should require an account and, if so, the scope of the account, the detail involved and the extent to which supporting documents or other material needs to be produced."

Summary of conclusions

1. In summary then, the following answers are given to the questions posed as issues: 1. Should the George and Annie Cork Trust be construed as a charitable trust or a private discretionary trust or is it invalid? The Trust should be construed as a private discretionary trust. 1. If the Trust is a charitable trust, is it necessary to settle an administrative or cy-près scheme? It is not necessary to determine this issue since the Trust is not a charitable trust. 1. If an administrative or cy-près scheme should be settled, what are the terms on which that should occur? It is not necessary to determine this issue since the Trust is not a charitable trust. 1. If the Trust is a private discretionary trust, is the Plaintiff eligible to be appointed as a Beneficiary within the terms of Schedule 2 Item 2 of the Will? Yes. 1. If yes to 4, what test should the Court apply to determine whether the Plaintiff has (as a person eligible to be appointed as a Beneficiary) an entitlement to access to the documents sought in the Amended Summons? The jurisdictional basis to decide whether the Plaintiff is entitled to access the documents sought is not whether the Plaintiff has a proprietary interest in the Trust. One commences with the obligation of the Trustee to administer the Trust in accordance with the terms of the Will. The right to seek disclosure of trust documents "is one aspect of the Court's inherent jurisdiction to supervise, and if necessary to intervene in, the administration of the Trust". The power to order inspection is discretionary in the sense that it involves assessment and judgment. The Court exercises its jurisdiction as a court of equity, exercising its own judgement as to whether disclosure ought to be made at all, and, if so, to what extent and on what conditions. A person who may be appointed as a "Beneficiary" may seek access to documentation necessary to assess whether the trustee has acted in accordance with the terms of the Trust, and in this way, may ensure the trustee's accountability, albeit limited by the type of concerns raised in Erceg v Erceg. 1. If the correct test requires that the Court must be satisfied the Plaintiff has a proprietary interest in the Trust assets, what is his entitlement, if any, to access the documents sought in the Amended Summons? It is not necessary to answer this question. 1. If the correct test requires that the Court has a discretion to grant or withhold access, should the discretion be exercised in favour of the Plaintiff? The Court should exercise its discretion in favour of the Plaintiff. 1. If yes to 7, what is his entitlement to access the documents sought in the Amended Summons and to which documents? As requested by the first Defendant, the parties should be given the opportunity to agree upon the documents to be provided to the Plaintiff, failing which agreement the Court will determine the documents to be provided. 1. What conditions, if any, should be imposed on the Plaintiff's access to or use of the documents? The conditions, if any, to be imposed upon the Plaintiff, will depend upon the nature of the documents to be provided. The parties should be given the opportunity to agree upon the conditions, if any, to be imposed on the Plaintiff's access to, or use of, the documents, failing which agreement the Court will determine the conditions, if any. 1. Who may currently enforce the Trust? Any of the discretionary objects, or any of the "Beneficiaries" appointed could seek the intervention of the Court, assuming that there was a proper basis for that application. 1. Can the class of objects stated in Schedule 2 Item 2 be identified independently of the exercise of the trustee's discretion? Yes, if falling within "such persons, Trustees of Trusts (but excluding any Trusts which would result in a breach of the rule against perpetuities or the rule against accumulations) companies or charities, residing in or otherwise carrying on business in Dorrigo in New South Wales or surrounding areas as defined by the postcode 2453 as the Trustees shall before the vesting date appoint in writing to be beneficiaries" for the purposes of the Will. 1. Does UCPR rule 54 provide a basis for relief Yes. The power conferred by UCPR rule 54.3 is wide enough to be capable of compelling the provision of documents sought by the first Plaintiff in the Amended Summons.

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