A “True Construction”

A Trustee can at any time seek advice and directions from the Court in relation to the administration of a trust.

If a Trustee takes advantage of this means of seeking guidance then the Court has the power to relieve a Trustee of personal liability for subsequent proceedings for Breach of Trust in relation to the matter for which advice was sought.

The High Court of Australia in Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42 at [36] has emphasised the important of the need to first seek advice and directions from the Court before then later seeking relief from the Court in relation to a Breach of Trust action.

Courts have an inherent jurisdiction to provide advice and directions to trustees and State Trustee Acts generally provide a statutory power as well.

In South Australia a trustee can seek advice and directions pursuant to Section 91 of the Trustee Act 1936 (SA). If a Trustee seeks such advice and directions, the the Court has the power to relief a trustee from a personal liability for Breach of  Trust pursuant to Section 56 of the Trustee Act 1936 (SA).

Section 91 of the Trustee Act 1936 (SA) references Section 69 of the Administration and Probate Act 1919. Subsection 69(1) provides:

(1)   The Public Trustee shall, and any trustee, executor, or administrator may, when in difficulty or doubt, apply to a Judge for advice or direction as to matters connected with the administration of any estate, or the construction of any will, deed, or document”.

More information on seeking Judicial Advice can be found here.

The stating point in the determination of a “true construction” of the terms of a trust is to start with the Trust Deed that established the trust.

Missing Original Trust Deed

The trustee bears the primary obligation in relation to the whereabouts of a trust deed, because a trustee has the duty to ascertain the terms of the trust: Hallows v Lloyd (1888) 39 Ch D 686.

The Deed that establishes an employer-sponsored superannuation trust will generally be executed in two counterparts by both parties, with the sponsoring employer retaining one counterpart and the Trustees the other counterpart.

If both original executed counterparts are lost, then it will be necessary to seek advice and directions from the Court.

In Glenfor Pty Ltd, Application by [2007] VSC 222, the Court was required to rule on whether a copy trust deed should stand as the deed setting out terms of the first trust.

If an executed and duty stamped copy of the original Trust Deed can be located a Deed of Confirmation can be executed referencing the copy of the original Trust Deed.

Superannuation Trust Deeds will generally be drafted by a firm of solicitors or accounting firm. Sometimes this turns up an unsigned copy of the execution copy of the trust deed prepared by the firm, or they may be able to provide a copy of the trust deed precedent that was current at the date of establishing the trust, and it can be reconstituted from there. The application form, file notes or other contemporaneous documents and even the recollection of relevant persons may also be found which would permit reconstitution of the terms of the precedent trust deed.

In Sugden v Lord St Leonards (1876) LR 1 PD 154, the Court explained:

“… if the evidence of the contents of a long and complicated [document] were given by a professional man who had himself drawn the instrument or upon one or repeated occasions had had the opportunity of reading, that would, under ordinary circumstances, be more satisfactory than the evidence of a non-professional person, above all the evidence of a lady [sic].”

It is usually appropriate to apply for a court order that the unsigned execution copy or reconstructed copy of the trust deed stand in place of the terms of the original trust deed, if a signed copy of the original Trust Deed or the original itself cannot be located.

The success of such an application is dependent on the evidence that can be adduced as to the terms of the original trust deed. The less evidence of the terms of the original trust the less likely such an application will be successful. There must be “clear and convincing proof not only of the existence, but also of the relevant contents, of the writing” {Maks v Maks (1986) 6 NSWLR 34, 37.

Marks v Marks was followed in Mack v Lenton (1993) 32 NSWLR 259 where Young J held that where secondary evidence of a lost deed is given the court requires clear and convincing proof of the the existence of the document and its contents.

Jusidiction of the Supreme Court of Victoria

For the court to have jurisdicition to grant relief with respect to a trust, the trustee ot trustees must be within the court’s jurisdiction, though the trust property need not be.1

(1) Couzens v Negri [1981] VR 824; (1981) 5 ACLR 666; Schmidt v Won [1998] 3 VR 435; Chellaram v Chellaram [1985] 409.


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