Eligible beneficiaries of a discretionary trust who claim to be the trustee or appointor by reason of an alleged breach of fiduciary duty have standing to bring derivative proceedings to establish that claim, even where the trustee is unwilling to sue. However, mere status as an eligible beneficiary, without a claim to office, is unlikely to establish the requisite special circumstances. The broad declaratory relief jurisdiction under s 75 of the Supreme Court Act 1970 (NSW) cannot be used to side-step restrictions on standing. When assessing breach of fiduciary duty, courts must analyse the precise scope of the fiduciary obligations and identify a real (not merely theoretical) conflict of interest, having regard to the terms of the trust and the circumstances in which the trustee was already entitled to act self-interestedly. Whether an appointor of a discretionary trust owes fiduciary obligations remains an open question.
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