Hancock v Rinehart

(2015) 106 ACSR 207; [2015] NSWSC 646

Supreme Court of NSW

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Interrogate

Catchwords

1. Equity
2. › Trusts and trustees
3. › Trustees — appointment, dismissal and replacement
4. › Selection of replacement trustee
5. › Relevant principles and considerations
6. › Whether court should appoint a beneficiary as trustee
7. › Trustees Act 1962 (WA), s 77(2)(a)
1. Equity
2. › Trusts and trustees
3. › Powers, duties, rights and liabilities of trustees
4. › Exercise of powers
5. › Fraud on power
6. › Whether in consenting to alteration of constitution of company in which trust is shareholder, trustee was motivated by improper collateral purpose
1. Equity
2. › Trusts and trustees
3. › Powers, duties, rights and liabilities of trustees
4. › Respective functions of managing trustee and custodian trustee
5. › Whether proposal subverts purpose of custodian trustee apparatus
6. › Trustees Act 1962 (WA), s 15
1. Equity
2. › Trusts and trustees
3. › Applications to the court for advice and authority
4. › Whether court has power to confer authority on trustee to amend trust deed
5. › Trustees Act 1962 (WA), s 89

Quick Take

A beneficiary may be appointed as replacement trustee where the circumstances require a trustee robust enough to resist the influence of the outgoing trustee, and where the risks of conflict of interest can be mitigated by conditions such as requiring judicial advice before significant decisions. Audited annual financial statements do not discharge a trustee's obligation to account; proper accounts must show each individual receipt and payment supported by vouchers. A settlement deed releasing claims for trust documents does not release the trustee's ongoing obligation to permit inspection of all trust documents, regardless of their date. The obligation to account is part of a trustee's irreducible core obligations and cannot be excluded, but a past dispute about accounting may be settled by release.