By Chris Brodrick, Partner
The question of what information a beneficiary can compel from a trustee remains one of the most contested aspects of Australian trust law. The contemporary position blends two lines of authority: a proprietary approach – which treats access as flowing from a beneficiary’s equitable interest in trust property – and a discretionary approach – which treats disclosure as an incident of the court’s inherent jurisdiction to supervise the administration of trusts.
Recent authority in Australia established that the proprietary approach as being the predominant approach by the Court. That is, a beneficiary has an entitlement to inspect trust documents as of right subject to exceptions. However, the application of proprietary approach still fits within a range of modifiers and may not apply in some circumstances.
Recently in Liguo Zhai v Bensons Funds Management Pty Ltd (in its capacity as trustee for the Bensons Secured Income Fund) [2025] VSC 753, the court reinforced that the text of the trust instrument can meaningfully calibrate disclosure. The court determined that the words of the deed precluded reliance on the proprietary approach because trust documents fell within the definition of ‘Assets’ under the trust deed. In turn, the deed, despite being in respect of a unit trust, precluded ‘any claim to an interest in an Asset of the Fund or the purported exercise of a right in respect of an Asset [48]’. Accordingly, despite being the predominant approach, the court determined that the proprietary approach did not apply.
Clauses restricting access to trustee reasons or confidential third‑party information are commonly upheld, although they do not oust the court’s supervisory jurisdiction. Recent commentary around Smorgon v ES Group Operations Pty Ltd[1] and subsequent practice suggests courts honour such drafting but will still enforce production of core records where equity’s supervision so demands.
The Court therefore applied the discretionary approach. In doing so, the court examined the application of the “Erceg” factors.
The New Zealand Supreme Court in Erceg v Erceg[2] recast the nature of the court’s task: disclosure is not a free‑ranging “discretion” but a jurisdiction to be exercised according to principle, after evaluating a non‑exhaustive set of factors. These include the type and sensitivity of documents; the beneficiary’s proximity and reasons; confidentiality concerns; expense and practicality of compliance; the potential revelation of trustee reasons; and the availability of protective mechanisms (e.g., undertakings, redactions, confidentiality regimes). The court stressed that “basic trust information” should ordinarily be provided to a close beneficiary, though the outcome is fact‑sensitive.
In Bensons before determining the plaintiff’s application with respect to the Erceg factors, the Court turned to the question of defining a trust document. After a brief examination of the authorities including Re Londonderry’s Settlement[3], Mandie v Memart Nominees Pty Ltd[4] and Hartigan Nominees Pty Ltd & Anor v Rydge[5], the court stated: “Accordingly, a trust document is a document which is in the possession of the trustee and is a document which relates to the trust or its administration.” [56].
The Court’s approach to the definition highlights two elements. First that the document is in the possession of the trustee and second, that it must relate to the trust or its administration.
“Relating to the administration of the trust” is a broad question. On the one hand, every document held by a trustee may qualify. On the other hand, but virtue of the split definition, ‘possession’ and ‘relating’ must not be synonymous.
It is appropriate to think of the term ‘possession’ in the traditional sense of “possession” or “power”. That is, a physical holding of the document or a presently legally enforceable right to obtain or inspect the document (eg if held by an agent such as the trustee’s accountant or lawyer or by a third party that has an obligation to provide a document if called upon to do so). The concept of “custody” – the holding of a document without necessarily a legal right to it – may also apply, but the relationship between the trust and the document is critical.[6]
Determining what documents may be accessed can be approached by considering the exceptions to access that the Courts have identified. Common categories include documents evidencing deliberations, legally privileged information concerning disputes with beneficiaries advice a trustee receives for its own protection (i.e. not obtained for the trust as a whole), strategy documents, and confidential third-party materials.
The court ultimately did not have to adjudicate on this element of the dispute due to the abandonment by the unitholder of the majority of the categories of the documents he sought.
Of the balance of the documents sought by the plaintiff, he failed to persuade that Court that the trustee, which had provided disclosure on multiple occasions to the unitholder, had failed to comply with its duty. Bensons was wholly successful in defending the application.
For beneficiaries, establishing a clear understanding of the rights created or curtailed by the trust deed is critical. Identifying the type of document, establishing its relationship to the administration of the trust and the likelihood of the trustee possessing it are all essential. The beneficiary must establish that the documents fall outside the exceptions to production.
For trustees, read and understand your deed. Be prepared to produce core records promptly (deed, variations, financial statements, accounts), while resisting disclosure of materials that expose reasons, internal deliberations, or privileged advice. Understanding the provenance of documents, what third parties may have rights with respect to them, being realistic about the effort required to produce them, and knowing the impact on all beneficiaries of production are all essential elements of your deliberation about and response to a request for provision of information.
[1] [2021] VSC 608
[2] [2017] NZSC 28; see also Chan v Valmorbida [2020] VSC 590
[3] [1965] Ch 918
[4] (2014) 42 VR 325
[5] (1992) 29 NSWLR 405
[6] For example, a trustee offering custodial services will hold documents and hold documents which may not necessarily go to the administration of the trust
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