El Sayed v El Hawach

The case of *El Sayed v El Hawach* concerned a dispute between beneficiaries of a discretionary trust. The primary issue before the Court of Appeal of New South Wales was whether certain eligible beneficiaries had standing to bring a derivative action concerning the trust's administration, particularly in circumstances where proceedings had already been instituted against them, and they claimed to have become both trustee and appointor.

The court was required to determine two principal legal issues. Firstly, whether the eligible beneficiaries possessed the necessary standing to commence derivative proceedings, and if so, whether special circumstances existed to justify such an action. Secondly, the court considered whether the purported appointment of an eligible beneficiary, who also acted as the trustee's solicitor, as an appointor constituted a breach of fiduciary duty, and whether the fiduciary was obligated to consider the scope of their fiduciary obligations in making such an appointment.

In its reasoning, the Court of Appeal found that the eligible beneficiaries did have standing to bring the derivative action, establishing the existence of special circumstances. The court also determined that the appointment of the beneficiary who acted as solicitor did not constitute a breach of fiduciary duty, as no breach was established.

The appeal was dismissed, while the cross-appeal was allowed. Consequently, specific orders made on 20 December 2013 were set aside or varied, and the appellants/cross-respondents were ordered to pay the costs of the respondents/cross-appellants for both the appeal and the cross-appeal.