Astley & Ors v Austrust Ltd (A13-970 SLA

Astley and others (the appellants) appealed to the High Court of Australia against a decision of the Full Federal Court concerning the interpretation of a trust deed and the duties of a trustee. The dispute arose from the appellants' claim that Austrust Ltd (the respondent), as trustee of a unit trust, had breached its fiduciary duties by failing to take reasonable steps to prevent the trust property from being dissipated and by failing to obtain independent advice regarding the valuation of certain assets. The appellants sought to recover losses allegedly suffered by the trust as a result of these alleged breaches.

The High Court was required to determine whether the trustee had breached its duty to act with due care and diligence in managing the trust property, specifically in relation to the valuation and disposal of certain assets. A key issue was whether the trustee had a positive obligation to seek independent advice concerning the valuation of those assets, even if it believed the valuations provided were accurate. The court also considered the scope of the trustee's duty to protect trust property from dissipation and whether the trustee's actions or omissions in this regard constituted a breach of fiduciary duty.

The High Court, in a joint judgment, held that the trustee had not breached its fiduciary duties. Their Honours reasoned that a trustee is not obliged to obtain independent advice if it honestly believes, on reasonable grounds, that the advice it has received or the information available to it is sufficient for the proper performance of its duties. The court found that Austrust Ltd had acted reasonably in relying on the valuations provided and had taken appropriate steps to protect the trust property. The duty of a trustee is to act honestly and with the degree of prudence that an ordinary man would exercise in managing his own affairs, and the evidence did not demonstrate a failure to meet this standard.

The appeal was dismissed.