The Supreme Court of New South Wales in In the application of Brailey Holdings Pty Limited ACN 001 190 441 [2018] NSWSC 1493 has granted judicial advice that a trustee was justified in managing and administering two family trusts in accordance with the terms of facsimile deeds in circumstances where the original or copies of the deeds had been lost.
Background
In 1973, a parent had settled trusts for the benefit of each of his three children. Despite extensive searches, the trust deeds relating to two of the trusts could not be found. The trustee made an application under s 63 of the Trustee Act 1925 (NSW) for judicial advice that it was justified in managing and administering the two trusts in accordance with ‘facsimile deeds’ which it had prepared and which were in identical terms to the one existing trust deed, save for the identity of the beneficiaries.
Evidence
The evidence provided by the trustee in support of its application included:
- Hearsay evidence by the child who was the named beneficiary in the one existing trust deed that at the same time the trust was settled in favour of her in 1973, identical trusts were settled in favour of her siblings.
- Two deeds of appointment made in 1980, one relating to the one existing trust deed and the other relating to one of the lost trust deeds, pursuant to which the then trustee retired and the present trustee was appointed.
- A 1984 deed varying settlement of the one existing trust deed together with an opinion given by counsel in 1989 on a stamp duty issue which had arisen in relation to the variation, which opinion:
- referred to the various trust deeds (including the lost trust deeds);
- set out the main clauses of the various trust deeds; and
- referred to amending documents of 1984 which had been submitted to the Commissioner of Stamp Duties with the expectation that nominal duty only would be assessed in respect of the amending documents.
Decision
Kunc J of the Supreme Court was satisfied that the evidence, taken together, constituted clear and convincing proof not only of the existence of the lost trust deeds but also of the contents of the lost trust deeds – namely, that they were relevantly in the same terms as the one existing trust deed (at [2]; [17]).
His Honour indicated that he was prepared to draw the inference that where separate trusts were settled for the benefit of each of the children in a family, the likelihood was that those trusts would be in identical terms save for the identity of the particular beneficiaries. Thus, his Honour found that the lost trust deeds were in the same terms as the existing trust deed save for the identity of the beneficiaries. His Honour considered that, insofar as the contents of the lost deeds were concerned, the inference drawn by him was fortified by counsel’s opinion on the stamp duty issue because the clauses to which counsel referred in his opinion as being clauses in each of the trust deeds did appear in the one existing trust deed (at [16); [18]).
Accordingly, his Honour found that the facsimile deeds reproduced the terms of the lost trust deeds and concluded that the trustee was entitled to the judicial advice which it sought.
Comment
In coming to his conclusion, his Honour relied on Barp Nominees Pty Ltd [2016] NSWSC 990, a case in which judicial advice had been given in a similar situation. Barp had briefly considered the relevant authorities, one of which was Porlock Pty Ltd [2015] NSWSC 1243 which had dealt in some detail with the question of what a trustee should do when a trust deed could not be found. Porlock is summarised in K Ottesen, “Lost trust deed: Trustee seeks judicial advice” 4 September 2015.
