Cross & Cross (No. 3)

The case of *Cross & Cross (No. 3)* concerned a dispute between the beneficiaries of a trust and the trustees. The beneficiaries sought to remove the trustees and have new trustees appointed, alleging a breach of trust and a loss of confidence in the trustees' ability to manage the trust property. The matter came before Young J in the Supreme Court of New South Wales.

The primary legal issue before the court was whether the conduct of the trustees amounted to such a fundamental breach of trust or a loss of confidence that it warranted their removal and the appointment of new trustees. This involved an assessment of the trustees' actions in relation to their fiduciary duties and the overall administration of the trust.

Young J considered the established principles for the removal of trustees, which generally require a serious breach of trust, misconduct, or a situation where the trustees are incapable of acting or where there is a complete loss of confidence between the trustees and the beneficiaries. His Honour found that while there had been some mismanagement and a lack of transparency, the conduct did not reach the threshold for removal. The court emphasised that removal is a serious step and should not be taken lightly, particularly where the trustees' actions, though flawed, were not demonstrably dishonest or intentionally detrimental to the trust.

Ultimately, Young J declined to remove the trustees. Instead, the court ordered that the trustees provide a more detailed account of their dealings with the trust property and that they engage in more regular and transparent communication with the beneficiaries. The court indicated that further breaches or a continued lack of cooperation could lead to a different outcome in the future.