Discovery of Non-Trust Documents

Where a beneficiary seeks discovery of documents in a legal action against the trustee, the trustee must disclose those documents if they are in the trustee’s possession or control and are relevant to the issues in the legal action, whether or not they are trust documents1.

Pullen J in Schreuder v Murray [No. 2] [2009] WASCA 145; 41 WAR 169; 260 ALR 139 {Link}. ; stated at [10]:

“A trustee is the trustee of property for the benefit of the beneficiaries of the trust. The trustee and beneficiaries have a correlative duty and interest in the proper administration of the trust. The duty of the trustee includes a duty to properly perform the trust by adhering to and carrying out the terms of the trust. The beneficiaries have an interest and, indeed, a right to compel proper administration of the trust. The trustee and the beneficiaries are in a ‘formal legal relationship‘ and if the trustee obtains legal advice concerning the proper administration of the trust, then any legal professional privilege attaching to the advice obtained is the joint privilege of both the trustee and the beneficiaries. As such, the trustee and the beneficiaries, being entitled to joint privilege, may not maintain the privilege against each other.”

Proceedings for discovery are not premised on the existence of a proprietary right in the items sought to be discovered2.

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Lord Lowry in AT&T Istel Ltd V Tully quoted from Wigmore on Evidence vol 8 (McNaughtin revision, 1961 pp 453-455:

“It has never been doubted that the privilege against self-incrimination, like all privileges…is waivable. There are two possible ways of waiving:(a) By contract or or binding pledge before trial… The promise to waive may be embodied in an express contract or in contract implied by the conduct of the parties….Where there are not only the ingredients of an express or implied contract to waive privilege but also a fiduciary relation or other element of public policy making recognition of privilege unconscionable, the waiver of privilege may be specifically enforced and the witness held in contempt for failure to make disclosure. A broker or trustee or agent for example, might be compelled to render self-incriminating accounting to the person to whom the fiduciary duty is owed…”

Lord Templeton AT&T Istel Ltd V Tully noted that the foundation of privilege against self-incrimination lies in the revulsion against compelling a person to make incriminating statements because “it discourages the ill-treatment of a suspect and secondly it discourages the production of dubious confessions”.

However, none of this applies where a party to civil proceedings is merely required to disclose documents that exist prior to, and independently of, the order for disclosure.

Notes:

(1) Re Londonderry’s Settlement: Peat v Walsh [1965] Ch 918 at 938; [1964] 3 All ER 855; [1965] 2 WLR 299 per Salmon LJ, CA.

(2) AT&T Istel Ltd v Tully [1993] AC 45 at 65-6; [1992] 3 All ER 523; [1992] 3 WLR 3444 per Lord Lowrey, HL.


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This tab updated on 22 July 2015