A trustee is the archetype “fiduciary”.
Trustees are under a duty to act in the “best interests” of their beneficiaries. This is such a firmly established assumption that, in some jurisdictions, the duty has been incorporated explicitly in various statutes.
In Australia, all the Trustee Acts of all States and the Northern Territory impose “a duty to exercise the powers of a trustee in the best interests of all present and future beneficiaries of the trust”In South Australia, this provision is to be found in Section 8(1)(c) of the Trustee Act 1936(SA) and in Victoria in Section &(2)(c) of the Trustee Act 1958 (Vic).
This provision is also to be found in Section 52(2)(c) of the Superannuation Industry (Supervision) Act 1993. Where the “governing rules” of a fund are taken to include the provision that a trustee is required:
(c) to perform the trustee’s duties and exercise the trustee’s powers in the best interests of the beneficiaries;
Subsection 52A(2)(c) expands this obligation to include the Directors of corporate Trustees:
(c) to perform the director’s duties and exercise the director’s powers as director of the corporate trustee in the best interests of the beneficiaries;When a trustee applies to the court for prior approval of a “conflicted transaction”, or where a trustee surrenders his discretion to the court, the court must inquire whether the transaction is in the “best interests” of the beneficiaries1.
(1) Marley v Mutual Security Merchant Bank and Trust Co  3 All ER 198; The Public Trustee v Cooper  WTLR 901; Weth v Attorney-General (No.1)  Civ 263, -; Abacus (CI) Ltd v Hirschfield (2001-02) 4 ITELR 686; Re Steel  EWCH 154 (Ch);  WTLR 531
Byrne J stated in Invensys v Austrac Investments 2, with reference to the ‘best interests duty’ in Section 52(2)(c) of the Superannuation Industry (Supervision) Act 1993, the concept encapsulates two distinct obligations. The first is the duty of loyalty; and the second is the obligation ‘to pursue to the upmost with appropriate diligence and prudence the interest of the beneficiaries’. Thus, this second element is an exhortation to do the best you can for your beneficiaries3.
(2) Invensys v Austrac Investments  VSC 112; (2006) 15 VR 87; See also Manglicmot v Commonwealth Bank Officers Superannuation Corporation  NSWSC 363, -
(3) In Cowan V Scargill, Megarry V-C, too stated that trustees ‘must do the best they can for the benefit of their beneficiaries
Rein J in Manglicmot v Commonwealth Bank Officers Superannuation Corporation stated making reference to Jacob’s Laws of Trusts in Australia at :
Best interests of beneficiaries
 The third covenant is ‘to ensure that the trustee’s duties and powers are performed and exercised in the best interests of the beneficiaries’: s 52(2)(c). This covenant corresponds with the general law. Indeed, it has been said that the fact that much of the property in a superannuation trust will have been contributed by members makes the general law duty on the trustees to exercise their powers in the best interests of beneficiaries even more important.”
The New South Wales Court of Appeal stated in SAS Trustee Corporation v Arthur Cox  NCSCA 408; 285 ALR 623 at 110:
“I do not understand Basten JA’s statement in Swift (at) that the fact Mr Swift had contributed to the scheme, being an “underlying facet of the scheme … had no bearing one way or the other on the exercise of the discretion and the statute did not require their express consideration in this context” to mean that the fact of such contributions is not relevant to the larger, and different, question of ascertaining the scope of the appellant’s duties. The fact of such contributions has been said to ” make it even more important that the trustees should exercise their powers in the best interests of the beneficiaries”: Cowan v Scargill  Ch 270 (at 290) per Sir Robert Megarry V-C; see also Asea Brown Boveri Superannuation Fund No 1 Pty Ltd v Asea Brown Boveri Pty Ltd, McKeown, Gray & ABB Properties (Vic) Pty Ltd  1 VR 144 (at  ) per Beach J. The significance of employees’ contributions was also emphasised in Finch (at ).”
In Jacobs’ Law of Trusts in Australia (7th Ed) the following is stated at section  making reference to Section 52 of the Superannuation Industry (Supervision) Act 1993:
Best interests of beneficiaries
“The third covenant is ‘to ensure that the trustee’s duties are performed and exercised in the best interests of the beneficiaries’: s52(2)(c). This covenant corresponds with the general law1. Indeed, it has been said that the fact that much of the property in a superannuation trust will have been contributed by members makes the general law duty on the trustees to exercise their powers in the best interest of beneficiaries even more important2.
(#1) See Asea Brown Boveri Superannuation Fund No.1 Pty Ltd v Asea Brown Boveri Pty Ltd  1 VR 144 at -.
(#2) Cowan v Scargill  Ch 270 at 290;  2 All ER 750 at 763.
Cowan v Scargill
A leading case in relation to “best interests” is Cowan v Scargill  Ch 270;  2 All ER 750.