Jeffrey Laurence Herbert as trustee for the Blenkinsop Family Trust as trustee for the Blenkinsop Family Trust No 2 v Blenkinsop

The case involved Jeffrey Laurence Herbert, as trustee for the Blenkinsop Family Trust, and Blenkinsop, who were in dispute over the settlement of a claim. The case was heard by the Federal Court of Australia. The central issue was whether the current trustee had adequately considered all options and taken proper advice before settling a claim. Specifically, the court had to determine if the settlement was fair, given that the liability in question was allegedly incurred by former trustees.

The court examined the duty of the trustee to act in the best interests of the beneficiaries when settling claims. This involved assessing whether the current trustee had exercised proper diligence and taken appropriate legal advice. The court looked into whether the settlement terms were reasonable and whether the trustee had acted with the necessary care and skill expected of someone in that position. The court also considered whether the settlement process allowed for full consideration of all available options and whether the trustee had adequately communicated with the beneficiaries.

The court found that the trustee had not fully considered all options and had not taken proper advice before settling the claim. The court highlighted that the trustee's decision-making process was flawed, as they did not adequately consult with the beneficiaries or seek expert legal advice. Consequently, the court ruled that the settlement was not in the best interests of the beneficiaries. The court ordered that the trustee take appropriate steps to reconsider the settlement terms, ensuring that all options are properly evaluated and that proper advice is obtained.

The court's final order required the trustee to reassess the settlement terms and to ensure that all options are fully considered and that proper advice is obtained. The trustee was also directed to communicate with the beneficiaries to ensure they are adequately informed and involved in the decision-making process. This ruling underscores the importance of due diligence and proper legal advice in trust settlements.