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Beneficiaries, Beneficiary rights, General, Right to trust information, Testamentary trusts, Trustee liability, Trustees, Trusts

Costly failure to disclose trust information to minor beneficiary’s guardian

Beneficiaries of a trust – including a testamentary trust are entitled to information relating to the trust. In the Goodman v Campbell a minor beneficiary’s mother sought appointment as a litigation guardian following an executor’s refusal to provide information about the estate of which her minor son was the sole beneficiary.  The trustee of the estate having been noted as being “uncomfortable in the absence of some express authority in releasing information to someone who was not a beneficiary of the trust”.

 

After making the appointment, in the interests of progressing matters that Court directed at [9] that:

“ … a copy of this judgment is to be served on Mr Campbell, through his solicitors, and that Ms Goodman abstain from filing the proceeding for a period of 10 working days after that to ensure that Mr Campbell has an opportunity to consider the judgments of the Privy Council in Schmidt v Rosewood Trust Ltd [2003] UKPC 26; [2003] AC 709, and of the High Court in Foreman v Kingstone [2004] 1 NZLR 841. From his present stance, as far as it may be gleaned from the correspondence produced to the Court in support of this application, it could possibly be inferred that he has overlooked the principles of law applying to his duty of disclosure, which are discussed in these cases.”

 

Following this course of action the information sought was provided. However, the question of costs remained a live issue.

The court considered that the trustee’s position was unsupportable at law. The only authority that Ms Goodman required was the undisputed fact that she was the guardian of a minor beneficiary and as such was entitled to seek information by virtue of her status as guardian.  See The Cats’ Protection League v Deans.

 

Regarding whether the trustee should be entitled to costs where the trustee had failed to carry out duties the trustee owed a beneficiary the Court referred to Furness v Public Trustee where it is noted at 923 that:

 

“It is, of course, clearly established that as a general rule a trustee is entitled to his costs as between solicitor and client in litigation connected with the administration of the estate, unless it is shown that he has been guilty of some misconduct which results in excessive or unnecessary costs being incurred. Now, as stated in Lewin on Trusts 12 ed 887, it is the bounden duty of the trustee to keep clear and distinct accounts of the property he administers, and he exposes himself to great risks if he omits to do so. “It is the first duty,” observed Lord Plumer, “of a trustee to be constantly ready with his accounts”

 

The end result was an order that the trustee of the estate met all of his costs and Ms Goodman’s costs personally.

References:

  • Goodman v Campbell HC Christchurch CIV-2015-409-000259, 8 May 2015
  • Goodman v Campbell HC Christchurch [2015] NZHC 2780
  • The Cats’ Protection League v Deans (2010) 20 PRNZ 584
  • Furness v Public Trustee [1922] NZLR 920 at 923
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