Rights of Beneficiaries

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Once a trust has been duly constituted, the law imposes duties and obligations on the Trustee or Trustees and correlative rights on the beneficiaries under the trust.

The crucial feature of a pension scheme is not just that its basic and overriding purpose is to provide benefits but that such benefits are entitlements. {Refer Baird v Baird [1990] 2 AC 548, 556-7, LRT Pension Fund Trustee Co Ltd [1993] OPLR 225, 265-6}.

Upon joining a pension scheme, a member immediately acquires rights. These rights and entitlements are generally not dependent upon an exercise of discretion by the Trustee or Trustees.

Bryson J in Vidovic v Email Superannuation Pty Ltd (1995) NSWSC unreported stated:

“The basic purpose of the superannuation fund, and of all powers of the trustee under it, is that the funds will be used to pay entitlements where they exist, and will not be paid out where entitlements do not exist.”

French J stated in Australian Securities and Investments Commission In the Matter of Richstar Enterprises Pty Ltd (ACN 099 071 968) v Carey (No 6) [2006] FCA 814 at [30]:

“I accept that there are some rights enjoyed, even by the beneficiaries of a non-exhaustive discretionary trust with an open class of beneficiaries. They include the right to inspect the trust documents – Re Londonderry’s Settlement [1965] Ch 918 and the right to require the trustee to provide information about management of the trust fund – Spellson v George (1987) 11 NSWLR 300Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405. There is also a right to enforce the proper management of the trust by the trustee – Commissioner of Stamp Duties (Qld) v Livingston [1964] UKPC 2[1965] AC 694Re Atkinson [1971] VR 613.

More information on the right to have access to the “Trust Documents” can be found here.

More information on the right to require the trustee to provide information about the management of the trust can be found here.

More information on the right to enforce the proper management of the trust can be found here.

Lord Millett in the House of Lords in Foskett v McKeown [2000] 3 All ER 97 held at [120]:

“A beneficiary of a trust is entitled to a continuing beneficial interest not merely in the trust property but its traceable proceeds also, and his interest binds every one who takes the property or its traceable proceeds also except a bona fide purchaser for value without notice.

Upon the termination of a trust, the trustee must hand over the trust document and accounts to the beneficiaries if so required {Halbury’s Laws of Australia [430-4235] citing Wentworth v De Mountforth (1988) 15 NSWLR 348 at 356 per Hope JA, CA(NSW)}

Beneficiaries also have a statutory right to approach the court by way of summons (originating motion) for the determination of any question concerning the construction or administration of the trust1.

{Note #1}

South Australia: s 206 Supreme Court Civil Rules 2006 (SA)

Victoria: Supreme Court (General Civil Procedure) Rules 2005 (Vic) O54 r 2,3

New South Wales: s 63 Trustee Act 1925 (NSW)

Queensland: s96 Trusts Act 1973

Western Australia: s92 Trustees Act 1962 (WA)

Tasmania: s 604(3) Supreme Court Rules 2000 (Tas)

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