Jordan v Goldspring

[2021] NSWSC 7

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Jordan v Goldspring [2021] NSWSC 7

Hearing dates:

10 – 11 November 2020

Date of orders:

15 January 2021

Decision date:

15 January 2021

Jurisdiction:

Equity

Before:

Hallen J

Decision:

The Court:

(1) Orders that by 5 February 2021, the Defendants are to permit the Plaintiffs, by their legal representatives, to inspect a copy of:

(a) The Trust Deed, dated 1 June 2006, establishing the Goldsprings Family Trust;

(b) The Deed of Variation, dated 30 June 2008, relating to the Goldsprings Family Trust;

(c) The Trust Deed, of date unknown, establishing the Fred Goldspring & Sons Family Trust; and

(d) Any other Deed of Variation, dated between 1 June 2006 and the date of these orders, which had the effect of varying the terms of either the Goldsprings Family Trust or the Fred Goldspring & Sons Family Trust.

(2) Stands over the balance of the proceedings to 9:30 a.m. on Thursday, 18 February 2021, for the purpose of determining whether any further orders are necessary and to consider how the question of costs should be determined.

Catchwords:

EQUITY – Trusts and trustees – Where the Plaintiffs do not know whether they are beneficiaries or discretionary objects, or whether they are within a class of beneficiaries or discretionary objects, or whether they have an interest in the property subject to trusts – Doubtful beneficiaries – Whether entitled to access to trust documents – Where the Defendants read no evidence on the application for access to documents – Whether inferences should be drawn from the failure to give evidence – Whether Plaintiffs’ evidence sufficient to establish a prima facie case – Whether Plaintiffs entitled to access documents.

Legislation Cited:

Trustee Act 1925 (NSW), ss 12, 63

Uniform Civil Procedure Rules 2005 (NSW), rr 5.3, 54.3, Pt 5

Cases Cited:

Armitage v Nurse [1998] Ch 241

Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1955) 72 WN (NSW) 250

Azar v Kathirgamalingan (2012) 62 MVR 462; [2012] NSWCA 429

Birdseye v Roythorne & Co [2015] EWHC 1003 (Ch)

Bull v Lee (No 2) [2009] NSWCA 362

Chong v CC Containers Pty Limited (2015) 49 VR 402; [2015] VSCA 137

Crociani v Crociani [2014] UKPC 40

Erceg v Erceg [2017] 1 NZLR 320; [2017] NZSC 28

Fast v Rockman [2015] VSCA 61

Fay v Moramba Services Pty Ltd [2009] NSWSC 1428

Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405

Kafataris v The Deputy Commissioner of Taxation (2008) 172 FCR 242; [2008] FCA 1454

Lehtimäki v Cooper [2020] UKSC 33

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) 237 CLR 66; [2008] HCA 42

Manly Council v Byrne [2004] NSWCA 123

Miah v Miah [2020] EWHC 3374 (Ch)

Morice v The Bishop of Durham (1804) 9 Ves Jun 399; 32 ER 656

Morris v Smoel [2013] VSCA 11

Newell; Muriniti v De Costi (2018) 97 NSWLR 398; [2018] NSWCA 49

Notaras v Waverley Council (2007) 161 LGERA 230; [2007] NSWCA 333

NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90; [2004] HCA 48

O’Rourke v Darbishire [1920] AC 581

Palmer v Ayres (2017) 259 CLR 478; [2017] HCA 5

Poricanin v Australian Consolidated Industries Ltd [1979] 2 NSWLR 419

Prepaid Services Pty Ltd v Atradius Credit Insurance NV [2014] NSWCA 440

Re Estate Late Chow Cho-Poon; Application for judicial advice (2013) 10 ASTLR 251; [2013] NSWSC 844

Re Fairbairn, deceased [1967] VR 633

Romeo v Papalia [2012] NSWCA 221

Russo v Aiello (2003) 215 CLR 643; [2003] HCA 53

Sarant v Sarant [2020] NSWSC 1686

Schmidt v Rosewood Trust Limited [2003] 2 AC 709; [2003] UKPC 26

Spellson v George (1987) 11 NSWLR 300

Strong v Woolworths Limited (t/as Big W) (2012) 246 CLR 182; [2012] HCA 5

Trkulja v Markovic [2015] VSCA 298

Viljoen v Hayes [2017] NSWSC 801

Woolworths Ltd v Ryder (2014) 87 NSWLR 593; [2014] NSWCA 223

Wright v Stevens [2018] NSWSC 548

Wynne v Humberston (1858) 27 Beav 421; 54 ER 165

Texts Cited:

Lynton Tucker, Nicholas Le Poidevin QC, James Brightwell, Lewin on Trusts (20th ed, 2020, Thomson Reuters)

Category:

Principal judgment

Parties:

Katherine Mary Jordan (First Plaintiff)
Rhonda Fay Thomas (Second Plaintiff)
Lynette June Goldspring (Third Plaintiff)
Peter Michael Goldspring (First Defendant)
Mark Andrew Goldspring (Second Defendant)
Marianne Evelyn Goodchild (Third Defendant)
Goldspring Investments PM Pty Ltd (Fourth Defendant)
Goldspring’s Australia PM Pty Ltd (Fifth Defendant)
Goldspring’s Pipelines PM Pty Ltd (Sixth Defendant)
Goldspring’s Equipment Hire Pty Ltd (Seventh Defendant)
Goldspring’s Earthmoving & Heavy Haulage Pty Ltd (Eighth Defendant)

Representation:

Counsel:
J S Drummond (Plaintiffs)
D A Allen (Defendants)

Solicitors:
Nolan Commercial Law Practice (Plaintiffs)
Catalyst Legal Pty Ltd (Defendants)

File Number(s):

2019/00197779

Publication restriction:

Nil

Judgment

Introduction

1. These proceedings concern a dispute, essentially between the children of Frederick Martin Goldspring and Nita June Goldspring, both of whom are now deceased, and the entitlement of three of those children to see various documents relating to different trusts created during the lifetime of their parents. Without undue familiarity, or disrespect, after introduction, I shall refer to the members of the family, by her, or his, first name respectively.

2. There are seven children of Frederick and Nita, being Lynette June Goldspring, who was born in September 1951, Marianne Evelyn Goodchild, who was born in June 1953, Rhonda Fay Thomas, who was born in August 1955, Barry Frederick Goldspring, who was born in June 1959, Katherine Mary Jordan, who was born in February 1963, Peter Michael Goldspring, who was born in February 1967, and Mark Andrew Goldspring, who was born in August 1968. (These dates of birth were included in the written submissions of counsel for the Plaintiffs, but do not all appear in the evidence. I have taken them to be accurate as it was not suggested that they were not.)

3. Katherine, Rhonda and Lynette are the moving parties in these proceedings, whilst Peter, Mark and Marianne are the first three Defendants. Barry is not an executor of the Will of either Frederick or Nita. He did not play any part in the proceedings as either a party or as a witness.

4. The other Defendants are Goldspring Investments PM Pty Ltd (Investments), which is the fourth Defendant, Goldspring’s Australia PM Pty Ltd (GAPL), which is the fifth Defendant, Goldspring’s Pipelines PM Pty Ltd (Pipelines), which is the sixth Defendant, Goldspring’s Equipment Hire Pty Ltd (Equipment Hire), which is the seventh Defendant, and Goldspring’s Earthmoving & Heavy Haulage Pty Ltd (Earthmoving), which is the eighth Defendant.

5. At the hearing, Mr J S Drummond of counsel appeared for the Plaintiffs and Mr D A Allen of counsel appeared for all of the Defendants. (There was no separate representation for any of the companies. In a directions hearing, held on 26 September 2019, Lindsay J had noted that the solicitor on the record for the first to third Defendants also appeared for the fourth to eighth Defendants.) The matter was listed for three days commencing on 10 November 2020, but concluded within two days.

The Proceedings

6. By Summons filed 26 June 2019, superseded by an amended Summons filed on 9 September 2019, the Plaintiffs sought the production of various Trust Deeds, and Deeds of Variation, together with “[a]ll financial accounts, including without limitation, profit and loss and balance sheet reports together with all taxation returns” for a number of the Trusts for the financial years ending 30 June 2016, 2017, and 2018. They also sought the costs of the proceedings.

7. In support of the amended Summons, the Plaintiffs read an affidavit of the solicitor on the record for the Plaintiffs, Michael Raymond Nolan, affirmed 26 June 2019, and Ex MRN-1 to the affidavit; another affidavit of Mr Nolan, this one affirmed 6 November 2020; an affidavit of Rhonda Fay Thomas affirmed 24 August 2019; and an affidavit of Katherine Mary Jordan affirmed 24 August 2019. Each of the deponents was cross-examined. In addition, they tendered several documents (marked Ex P1 to Ex P5 respectively) to some of which reference will be made.

8. At the hearing, the Defendants read no evidence and tendered no documents. Prior thereto, they had served a number of affidavits but in the Outline of Written Submissions that was served shortly before the hearing, counsel foreshadowed the possibility that none of the affidavits would be read at the hearing, stating that a “decision will be made at the close of the plaintiffs’ case”.

9. The Plaintiffs’ underlying distrust of the natural Defendants was palpable, even though none of the Defendants actually attended the hearing (the Court having obtained the imprimatur of the Chief Justice for the hearing to occur in person).

10. It was also clear that there is a long history to this application, and to the relationship of the siblings, that does not have to be repeated. The antipathy of the two groups within the family would have made a common sense, practical, solution impossible to achieve.

11. The parties could not even agree upon a mechanism for disclosure whilst still protecting confidentiality, in order to avoid the hearing. For example, on several occasions prior to the hearing, it was suggested that the legal representatives discuss whether a copy of any of some of the Trust Deeds could be supplied, in a redacted form, to ensure non-disclosure of confidential information. The Court noted that safeguards might be imposed on the use of documents by requiring inspection to be undertaken by the professional advisers only, with an undertaking as to confidentiality, as well as other safeguards, to ensure the documents were used only for the purpose for which they were disclosed. (The Court suggested this course because it was thought that some transparency may avoid continued litigation between the parties.)

12. Although undertakings to the Court, in writing, by each of the Plaintiffs’ solicitor and counsel, were given, the Defendants were not prepared to accept those undertakings. This was because the Defendants must have suspected, what Mr Nolan admitted when cross-examined, namely that, for example, had a copy of the Trust Deeds been provided, the Plaintiffs would have sought to tender them in the proceedings, thereby sidestepping the Defendants’ requirement of confidentiality. (Naturally, the course that was suggested was not intended to have such a consequence and, accordingly, it was unsurprising that the Defendants did not accept the undertakings.)

13. As there was no evidence read by the Defendants, it cannot be concluded that there are issues of personal, or commercial, confidentiality, at least so far as the Trust Deeds are concerned, or that there is any practical difficulty in permitting, at least, inspection, if not copying, of the Trust Deeds that are sought, or that to do so would involve disproportionate cost. Nor is there any evidence going to the impact, if any, on the settlor, the trustee, the beneficiaries or discretionary objects, or on any third parties, if disclosure were made.

14. Following the cross-examination of Mr Nolan and of the first and second Plaintiffs, I heard oral argument that supplemented the written submissions that each counsel had delivered to the Court in accordance with directions. On the second day of the hearing, I suggested that the parties might consider attending mediation in order to avoid the various disputes (not limited to these proceedings) that existed between them. The legal representatives seemed to agree to this course, and I noted that the parties had requested that the judgment not be delivered until after the date on which they sent a joint email indicating that the matter had not been resolved between them.

15. Following subsequent email correspondence between the parties’ legal representatives and the Court, the nature of which does not have to be rehearsed, other than to note that the parties had discussed attending private mediation on 15 December 2020, the matter was administratively re-listed before me on 16 November 2020.

16. The Court then heard arguments, and counter-arguments, about whether a copy of the Trust Deeds and the Deeds of Variation, would be made available for inspection, and if so when, and whether, inspection would be only by counsel for the Plaintiffs, for the purposes of the mediation.

17. During the course of the argument, after discussion between the Bench and counsel, the Court adjourned the matter, twice, so that the legal representatives could further discuss the practical way in which the mediation could proceed. After each adjournment, as it appeared that each side was maintaining a determined, and an apparently, uncompromising, stance, no orders for mediation or otherwise, were made.

18. Before proceeding further, it is important to note, in relation to the production of the Trust Deeds and Deeds of Variation, that the Plaintiffs did not seek, and have not sought, at any time, relief under Uniform Civil Procedure Rules 2005 (NSW) (UCPR) Pt 5, which Part includes seeking an order for preliminary discovery against any prospective defendants, in order to determine whether the applicants may be entitled to make a claim for relief, against the prospective defendants, or any of them, and which provides that the prospective defendants must give discovery to the applicants of all documents that are, or have been, in the person’s possession, and that relate to the question of whether or not the applicants are entitled to make a claim for relief: UCPR, r 5.3.

19. Counsel for the Plaintiffs made clear, during submissions, that whilst the problem facing them could have “been easily resolved by this application being made by way of preliminary discovery”, that they could “take alternative routes in these proceedings”. Counsel also made clear that “we did not bring [the application] under that rule”: Tcpt, 10 November 2020, p 81(40) – p 82(05).

20. In the circumstances, it is necessary for the Court to be careful not to treat the application made by the Plaintiffs as if it were, in any way, exercising the jurisdiction under UCPR, r 5.3.

21. It is also important to note that the Defendants did not take the initiative and seek judicial advice under s 63 of the Trustee Act 1925 (NSW) at any time prior to the commencement of the proceedings. That section relevantly provides that a trustee may apply to the Court for an opinion, advice, or direction, on any question respecting the management, or administration, of the trust property. Remembering that the principal purpose of the section, and the opinion, advice, or direction, given under it, is the protection of the interests of the trust and, incidentally, protection of a trustee acting in those interests: 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) 237 CLR 66 at 127–128 [196]; [2008] HCA 42 at [196] (Kiefel J); Re Estate Late Chow Cho-Poon; Application for judicial advice (2013) 10 ASTLR 251 at 279–280 [182]; [2013] NSWSC 844 at [182] (Lindsay J), the advice that could have been sought concerns whether they would be justified in defending these proceedings and/or whether they would be justified in not producing trust documents to the Plaintiffs.

22. I should mention that during one of the directions hearings, a suggestion was made, on behalf of the Defendants, that the Trust Deeds could be produced to the Court for inspection without them being disclosed to the Plaintiffs. I rejected that course because it infringes basic notions of procedural fairness. I felt uneasy at the possibility of ruling, after privately considering particular documents that had not been seen, by the Plaintiffs or their legal advisers, that documents should not be produced based upon my becoming aware of something that was unknown to, and, possibly unknowable, by them, a situation which in contested applications should be avoided.

The nature of the dispute

23. In par 32 of the affidavit affirmed 26 June 2019, by Mr Nolan, the following passage appears:

“Without the assistance of the Court in making the orders sought in the Summons filed herewith, the plaintiffs have no capacity to:

a. ascertain whether or not they are beneficiaries of each or any of the Goldsprings Trusts; and

b. ascertain the extent to which the Goldspring Trusts are being managed in a manner by which the plaintiffs’ legitimate interests in benefitting from some or all of those trusts are being unjustly and unlawfully ignored and the quantum of the financial consequences flowing from any potential actions in breach of trust.”

24. Counsel for the Plaintiffs, candidly, stated that “we suspect, but can’t prove without production of the documents, that these trusts had classes of beneficiaries which would include the plaintiffs”: Tcpt, 10 November 2020, p 9(30–32).

25. Thus, the underlying dilemma posed by the case is clear. On the one hand, the Plaintiffs assert that they wish to have access to the various documents as they may be persons, or within the class of persons, who are entitled to disclosure of trust documents, or that they are persons interested in the property subject to a trust. They argue that they require the documents in order to ascertain whether they are beneficiaries or discretionary objects, or within a class of beneficiaries or discretionary objects, or persons interested in the property subject to a trust, in respect of which Trust Deeds have been sought.

26. The Defendants submitted that the Plaintiffs had not established, or come close to establishing, any entitlement to disclosure of any of the documents that had been sought. They submitted that there is no jurisdictional basis for the Court to compel the Defendants, as trustees, to disclose any of the Trust Deeds, or Deeds of Variation, or any of the financial records, to enable the Plaintiffs to satisfy themselves that they are, or are not, beneficiaries or discretionary objects, or within a class of beneficiaries or discretionary objects or persons interested in the property subject to a trust, in respect of which Trust Deeds have been sought. They submitted, also, that if the Plaintiffs have not satisfied the Court they are beneficiaries, or discretionary objects, or within a class of beneficiaries or discretionary objects or persons interested in the property subject to a trust, there is no discretion to exercise in respect of any of the Trust documents which have been sought.

27. Whilst the Defendants relied upon the passages stated by each of the Plaintiffs’ solicitor and counsel, respectively, quoted above, there is no specific evidence that the Plaintiffs are bringing the application for an improper purpose, although it is clear that there is a high degree of animosity and distrust between the Plaintiffs and, in particular, Marianne. Both Rhonda and Katherine clearly despise Marianne, as demonstrated by Katherine describing her as “evil” and Rhonda describing her as “manipulative” and “controlling”: Tcpt, 10 November 2011, p 30(39–45), p 45(40–44), p 60(07–13). (There was no basis, in the evidence, for those descriptions.)

Receipt of supplementary submissions by counsel for the Plaintiff

28. On 7 December 2020, that is, over three weeks after the final day of the hearing, the solicitor for the Plaintiffs sent an email attaching a document entitled “Additional Submissions on Behalf of the Plaintiffs”. This was done without the leave of the Court and without the consent of the Defendants.

29. In those circumstances, at my request, my Associate sent an email to the legal representatives of each of the parties to inquire whether the Defendants consented to those submissions being read, and, if so, whether the Defendants required an opportunity to prepare submissions in reply.

30. On 8 December 2020, the solicitor for the Defendants replied, with admirable brevity:

“Dear Madam Associate

Our clients do not consent to the filing of these submissions.”

31. Shortly thereafter, at my request, the following email was sent on 8 December 2020, to the legal representatives of the parties:

“This email is sent on behalf of his Honour

Dear All,

His Honour has received the email from the Defendants’ solicitors.

In the circumstances, his Honour does not propose to have regard to the submissions.”

32. The Plaintiffs made no subsequent application for leave to rely upon the supplementary submissions.

33. Parties and legal representatives should not assume that there is a right to lodge, and have considered, supplementary submissions sent to the Court after the conclusion of a contested hearing, and absent leave previously given, to that effect, even if the consent of the other party is obtained. The High Court has deprecated the provision of supplementary written material after the conclusion of oral argument, without leave. McHugh ACJ, Gummow, Callinan and Heydon JJ described doing so as “unsatisfactory” and “impermissible”: NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90 at 159 [192]; [2004] HCA 48 at [192].

34. In Notaras v Waverley Council (2007) 161 LGERA 230 at 267 [147]; [2007] NSWCA 333 at [147], Tobias JA (Mason P and Hodgson JA agreeing) wrote:

“As leave to file the final submissions was neither sought nor granted, authority requires that they should be ignored except for para 66 and the material to which that paragraphs refers: Carr v Finance Corporation of Australia Ltd [No 1] (1981) 147 CLR 246 at 258 per Mason J; In the matter of an application by the Chief Commissioner of Police (Vic) [2005] HCA 18; (2005) 79 ALJR 881 at 890 [53]-[54] per Kirby J; Dwyer v Commonwealth [Bank] of Australia (1995) 31 ATR 48; Kirwan v Cresvale Far East Ltd (In liq) [2002] NSWCA 395; (2002) 44 ACSR 21 at [340] per Young CJ in Eq; Chapmann v Caska [2005] NSWCA 113 at [19] per Beazley, Giles and Tobias JJA. As Mason J said in Carr and Kirby J in ex parte the Commissioner of Police, the notion that supplementary submissions can be filed without leave is misconceived and this is so even if the other party to the proceedings consents. It should not occur.”

35. In Bull v Lee (No 2) [2009] NSWCA 362, although a case involving an appeal, the Court (comprising Allsop P, Campbell and Young JJA), after quoting the passage in Notaras v Waverley Council, added, at [9]:

“The effect of making submissions after judgment has been either delivered or reserved, that go beyond the scope of any leave that has been granted is not confined to having those submissions ignored. Counsel should understand that it is a breach of their professional responsibilities to the Court to seek to make submissions that go outside the scope of the leave that has been granted. For counsel to act in that way seeks to undermine the important principle that, save in the most exceptional circumstances, all arguments relating to an appeal should be put at the one time. It has the capacity to cause waste of the Court’s time, and both waste of time and expense for counsel’s opponent in deciding what to do about the submissions that have been made without leave.”

36. Bearing in mind those principles, the proper course was to disregard the further submissions. Accordingly, I have not had regard to the supplementary submissions provided by counsel for the Plaintiffs. Legal practitioners should also bear in mind the observations set out above.

37. In relation to the costs of the supplementary submissions, those costs should be borne by the Plaintiffs whatever other costs order is made.

Background Facts

38. It is next convenient to summarise the relevant background facts that give rise to the dispute. I shall then turn to the law that I consider applies in the case.

39. The earliest Will of each of Nita and Frederick is one made on 8 February 1994, being “mirror Wills”. By Clause 1, each of Nita and Frederick provided for the whole of her, and his estate, respectively, to pass first, to the other, absolutely. By Clause 3, if he, or she, did not survive, the testator’s shares in the company known as Fred Goldspring & Sons Pty Limited were to pass to Peter and Mark in equal shares as tenants in common, and, by Clause 4, with the balance of the rest and residue of the estate, to pass to their seven named children, “in equal shares as tenant in common”: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/74–77.

40. Nita died on 8 January 2008. Her last Will is one dated 25 June 2007. On 11 April 2008, this Court granted Probate of her Will to Peter, Mark and Marianne, the executors appointed under the Will.

41. Frederick died on 2 November 2014. His last Will was also dated 25 June 2007. This Court granted Probate of his Will and a codicil dated 3 June 2008 to Peter, Mark and Marianne, the substitute executors, in place of Nita, appointed under the Will and codicil on 4 May 2016.

42. The last Wills of Nita and Frederick, in all material respects, are also “mirror Wills”. It is, therefore, only necessary to refer to what appear to be the common Clauses of both Wills:

1. By Clause 1, all previous testamentary acts were revoked.

2. By Clauses 2.4 and 2.5 of Fred’s Will (Clauses 2.3 and 2.4 of Nita’s Will), there was the appointment of trustees of certain trusts.

3. Clause 3 described the three parts of the Will, in general terms, being Part A, that “sets out how my estate is to be divided, Part B sets out the instructions and discretionary and other powers” given to the executors, and Part C, which included “general administrative provisions”.

4. Clause 11.3 of each Will was in the following terms:

“My executors shall do all in their power to ensure that those powers and shares pass equally to those persons who receive an actual portion of my estate (whether that portion is held on trust or otherwise) under clause 12 or 13 of this Part (or their nominees) so as to give effect to my intentions as set out in the balance of Part A of this Will (‘the appointor’).”

43. Apart from the specific devises of shares in certain companies, each of which is the Trustee of an identified Trust, each Will dated 8 February 1994 of Frederick and Nita, and his, and her, last Will, dated 25 June 2007, respectively, provided for the remainder of their estates to pass, first, to the spouse but if the spouse did not survive the deceased by 30 days, to pass equally to the seven children as tenants in common in equal shares.

The Companies

44. From about June 1995, some of the family conducted a heavy haulage trucking business from premises situated at Maitland, NSW.

45. On 20 March 1995, Goldspring’s Earthmoving Pty Limited was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/102. This is a separate company from the eighth Defendant in the present proceedings, and was, on 11 April 2013, deregistered.

46. On 20 December 2007, Equipment Hire was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/103.

47. On 23 June 2008, Pipelines was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/104.

48. On 23 June 2008, Investments was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/105.

49. On 23 June 2008, GAPL was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/106.

50. On 24 June 2008, Earthmoving was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/107. Advertising in The Australian Mining Review in 2019, depicts that the company “has been operating for more than 20 years, offering its clients complete solutions in transport logistics, rail and civil industries”: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/126.

51. On 14 January 2010, Goldspring Property Pty Ltd was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/108.

52. On 13 July 2010, Goldspring’s Developments Pty Ltd was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/109.

53. On 31 March 2017, Goldspring’s Group Pty Ltd was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/110.

54. On 6 June 2017, Goldspring’s Equipment Group Pty Ltd was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/112.

55. On 19 April 2017, Goldsprings Heavy Haulage Pty Ltd was registered as an Australian Proprietary Company limited by shares: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/111.

56. It is likely that each of Peter, Mark and Marianne, is a director of, and each holds one share of three issued shares, in each of the companies.

57. By Deeds of Retirement and Appointment of Trustee, dated 30 June 2008, Goldspring Investments Pty Limited retired as the Trustee of The Goldspring Investment Trust and Investments was appointed as its Trustee; Goldsprings Pipelines Australia Pty Ltd retired as the Trustee of Goldspring’s Pipelines Australia Trust and Goldsprings Pipelines Australia PM Pty Ltd was appointed as its Trustee; and Goldspring’s Australia Pty Ltd retired as Trustee of the Goldspring’s Family Trust and GAPL was appointed as its Trustee. (The Deed of Retirement and Appointment of Trustee for the Goldspring’s Pipelines Australia Trust was not in evidence and what has been set out is based upon the ASIC search for the companies and from other documents registered with NSW Land Registry Services (formerly New South Wales Land and Property Information). The other two Deeds of Retirement and Appointment of Trustee are in evidence.)

What is known of the Trusts

58. The relevant Trusts, the Trust Deeds of which are sought, are the Fred Goldspring & Sons Family Trust, which Trust was settled in 1991; The Goldspring Investment Trust, which Trust was settled by Deed dated 11 April 1995; the Goldspring’s Family Trust, which was settled by Deed dated 1 June 2006; and the Goldsprings Pipelines Australia Trust, which was settled in by Deed made in 2007. (The dates 1991 and 2007 may not be the subject of evidence, but have been taken from the submissions of counsel for the Defendants and are not the subject of apparent dispute.)

59. As at 8 January 2008, the date of Nita’s death, the corporate trustee of the relevant Trusts were Fred Goldspring & Sons Pty Limited as trustee for the Fred Goldspring & Sons Family Trust; Goldspring’s Australia Pty Ltd as trustee for the Goldsprings Family Trust; Goldspring Investments Pty Limited as trustee for The Goldspring Investment Trust; and Goldspring’s Pipelines Australia Pty Ltd as trustee for the Goldsprings Pipelines Australia Trust. That much is apparent by the terms of Nita’s last Will: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/37.

60. Since 26 April 2016, the Plaintiffs have been seeking production, by the Defendants, of the Trust Deeds for the Goldspring’s Family Trust and the Fred Goldspring & Sons Family Trust. As stated, they have candidly admitted that they are “unaware whether the Goldspring Trusts are unit trusts or discretionary trusts or a combination of both”: Affidavit, Michael Raymond Nolan, 26 June 2019 at par 9.

61. As stated, the Trustees of each of those Trusts (and the Goldsprings Pipelines Australia Trust and The Goldspring Investment Trust), have refused, and continue to refuse, to produce to the Plaintiffs, or to their legal representatives, the original Trust Deeds, any amended Trust Deeds, and/or the financial statements of each of the Trusts for the years ending 30 June 2016 to 30 June 2018.

62. As the original Trust Deeds have not been produced to the Court, the Court knows nothing about the nature of any of the Trusts, including its purpose, its terms, or how it was to be administered during the lifetime of each the parents of the natural parties, or since the death of each of the parents.

63. Naturally, because the Defendants did not read any evidence, there is no evidence about how each of the Trusts has operated. What is known, however, is that none of the Plaintiffs has received any distributions, or otherwise has been given any information about any of the Trusts. In the circumstances, it is not difficult to see why the Plaintiffs might have come to the view, since the Defendants have not fully disclosed the position regarding the Trusts, that examination of available trust documents might cast light on whether they are beneficiaries or discretionary objects, or whether they are within a class of beneficiaries or discretionary objects or whether they have an interest in the property subject to trusts.

The Properties

64. On 22 January 1990, Frederick and Nita purchased, as joint tenants, a property, at Coomera, on the Gold Coast, for $205,000. There was a Bill of Mortgage to the National Australia Bank, securing a debt of $150,000, registered on title.

65. On 30 January 2006, Frederick and Nita sold the Coomera property for $2,500,000. At or about that time (5 January 2006), the Mortgage was discharged: Affidavit, Rhonda Fay Thomas, 24 August 2019 at par 8, annexures C, D.

66. On 16 June 1995, Goldspring Investments Pty Limited purchased land at Cessnock Road, Maitland for $148,500. This property was sold on 15 June 2011 for $270,000.

67. On 1 August 2006, Goldspring’s Australia Pty Ltd purchased a property located at Harpers Hill, in New South Wales, for $575,000. The land purchased comprises about 24 acres: Affidavit, Michael Raymond Nolan, 26 June 2019 at par 22, Ex MRN-1/88; Affidavit, Rhonda Fay Thomas, 24 August 2019 at par 13.

68. On 21 December 2006, Goldspring Investments Pty Limited purchased a property at Kyle Street, Rutherford (the Kyle Street Property) for $850,000: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/91.

69. On 28 September 2009, Investments purchased land at Sloane Street, Paterson, for $260,000.

Conversations relied on

70. The primary basis for the Plaintiffs’ claim (without, at this stage, referring to their reliance upon the fact that two of the trusts have, as part of their name “Family”, and the inference that each would include a class of beneficiaries, one might expect, being, at least, all of the children of Nita and Frederick), appears to be an alleged conversation between Nita and each of Rhonda and Katherine, in about mid-2006, following the sale of the Coomera land. The evidence of those conversations was admitted over objection.

71. On Rhonda’s account, Nita had said that she and Frederick had used the proceeds from the sale of the Coomera land to purchase the property at Harpers Hill; that the Harpers Hill property was purchased through a family trust in which all of the children were named; that the land, eventually, would be able to be subdivided and, once that had occurred, all of the children would share in the benefit of the land: Affidavit, Rhonda Fay Thomas, 24 August 2019 at par 10.

72. Katherine’s conversation, whilst similar, did not contain any mention of a trust. On her account, Nita had said that she and Frederick had purchased the land at Harpers Hill and that, once the land was subdivided, all of the children would share in the benefit. She did not say that there was any mention of a family trust, whether used as a vehicle for the purchase or otherwise.

73. Katherine gave additional evidence of a conversation with Nita about the Kyle Street Property. Again, there was no mention, in that conversation, about the existence of any trust: Affidavit, Katherine Mary Jordan, 24 August 2019 at pars 8, 10.

74. Counsel for the Plaintiffs, relevantly, submitted, in writing, that:

“20.   Both the conversations set out by the First and Second Plaintiffs … together with the Wills of Fred and Nita … provide a strong basis for each of the First to Third Plaintiffs, being of the belief and understanding that Fred and Nita intended them to be beneficiaries of each of the Trusts created by Fred and Nita prior to 23 June 2007. Those Trusts being:

(i)   the Fred Goldspring & Sons Family Trust, the Trustee of which was the Fred Goldspring & Sons Pty Ltd;

(ii)   the Goldsprings Investment Trust … the Trustee of which was the Goldsprings Investment Pty Ltd …;

(iii)   the Goldsprings Family Trust … with the Trustee of which was Goldsprings Australia Pty Ltd …; and

(iv)   the Goldsprings Pipelines Australia Trust … the Trustee of which was the GPAPL.”

75. I have, in many cases, dealt with the Court’s treatment of evidence of conversations with a person since deceased. Most recently, I wrote in Sarant v Sarant [2020] NSWSC 1686 at [92]–[99]:

“… it is important to note that the Court exercises caution in weighing any evidence of any alleged conversation with a deceased person: Plunkett v Bull (1915) 19 CLR 544 at 548–549 (Isaacs J); [1915] HCA 14.

As Wilcox J observed in Clune v Collins Angus & Robertson Publishers Pty Ltd (1992) 25 IPR 246 at 253; [1992] FCA 503 at [29]:

‘[I]t is trite to say that evidence of conversations between a living witness and a dead person should be scrutinised with particular care, especially where there was no occasion for the dead person to record his version of them before his death. Of course, that is not to say that such evidence cannot be true; it obviously may. But it does mean that any matter adversely affecting the credit of the witness has special importance; the witness cannot be refuted in the usual way.’

In Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 789, McLelland CJ in Eq, referred to the proposition that:

‘in a claim based on communications with a deceased person, the court will treat uncorroborated evidence of such communications with considerable caution …’

In Varma v Varma (2010) 6 ASTLR 152 at 244 [419]; [2010] NSWSC 786 at [419], Ward J (as her Honour then was) emphasised the need for ‘[c]areful scrutiny’ in such cases. Her Honour, at [424], considered that the need for scrutiny was increased by a recognition of the underlying fallibility of human memory, citing the explanation given by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319:

‘… human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.’

Whilst there is no absolute legal requirement for it, I should also look for some corroboration: Re Hodgson; Beckett v Ramsdale (1886) 31 Ch D 177 at 183 (Sir J Hannen P); Day v Couch [2000] NSWSC 230 at [9] (Bryson J); Weeks v Hrubala [2008] NSWSC 162 at [20] (Young CJ in Eq).

Whelan J (as his Honour then was) in Webb v Ryan [2012] VSC 377 referred to the difficulties in assessing this type of evidence, writing, at [22]:

‘An important matter which may arise in these kinds of cases is the difficulty of assessing evidence concerning things allegedly said by a person who is dead. The court can never be certain it knows all the circumstances, and more often than not one may be sure that the court knows few of them. It is impossible to hear what the other party to the conversation, the deceased, says about it. There is a significant risk of reconstruction. There are dangers in relying on evidence of what may have been a casual observation made to a person who at the time had no reason to remember the exact words used. In the light of these concerns, a substantial burden is placed upon an applicant whose case relies upon such evidence. Such evidence must be very carefully examined.’ (citations omitted)

I also remember s 140 of the Evidence Act 1995 (NSW), in respect of which Campbell JA (with whom Bergin CJ in Eq and Sackville AJA agreed) wrote in Brown v New South Wales Trustee and Guardian (2012) 10 ASTLR 164 at 176 [51]; [2012] NSWCA 431 at [52]:

‘To satisfy an onus of proof on the balance of probabilities is not simply a matter of asking whether the evidence supporting that conclusion has greater weight than any opposing evidence. As well, both under the common law and also under s 140 Evidence Act 1995, the evidence must be enough to enable the court to feel actual persuasion that a particular fact is so … I respectfully agree with the observation in Cross on Evidence, 8th Australian edition (2010) LexisNexis [9130] and footnote 184 that “according to ALRC 26 [998], the provision does not require actual belief; but that is not what the language says”. What s 140(1) says is:

“In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.”

It is perfectly possible for there to be a scrap of evidence that favours one contention, and no countervailing evidence, but for the judge to not regard the scrap of evidence as enough to persuade him or her that the contention is correct.’ (citations omitted)”

76. In this case, there is no documentation, contemporaneous or otherwise, in support of the Plaintiffs’ case concerning the events of 2006. The evidence of the two Plaintiffs must be approached with that fact and with the cautionary words referred to in the authorities in mind.

77. The second Plaintiff, Rhonda, was cross-examined at some length by counsel for the Defendants. Rhonda accepted that she had not been given her a copy of any of the Trust Deeds and that she had never received any money from the Trusts: Tcpt, 10 November 2020, p 25(50) – p 26(32). She also accepted that she, and Nita, had a falling out that began in 1999 and lasted until Nita’s death. Through that same period she accepted, and it was apparent generally from the tenor of her evidence, that there was significant animosity between the siblings, so much so that two factions had formed, with the three Plaintiffs on one side, and the three natural Defendants on the other: Tcpt, 10 November 2020, p 28(35) – p 29(41).

78. During that period, Rhonda admitted that she only spoke to Nita on two occasions: Tcpt, 10 November 2020, p 31(43) – p 42(11). The latter of those two occasions was the one that was said to have included the conversation where the purchase of the Harpers Hill property and the existence of the family trust was purportedly disclosed.

79. Counsel for the Defendants referred Rhonda to evidence of the Deed of Retirement and Appointment of Trustee for the Goldspring’s Family Trust, and the recital in that Deed which indicated that the Trust had been settled on 1 June 2006: Affidavit, Michael Raymond Nolan, 26 June 2019 at Ex MRN-1/63. Whilst, initially, she denied that she had seen any documents relating to that Trust prior to making her affidavit, once having been shown the evidence, Rhonda accepted that she had been shown the document prior to the making of her affidavit: Tcpt, 10 November 2020, p 33(36) – p 35(04).

80. It was put to her, and she denied, that she was lying about the conversation said to have occurred with Nita in 2006: Tcpt, 10 November 2020, p 35(47) – p 36(18).

81. Upon further questioning, Rhonda asserted that nothing else, apart from the purchase of the Harpers Hill property and the trusts, had been discussed. She denied that she was the one who had raised the topic of Nita’s finances or the topic of the proceeds of sale of the Coomera property: Tcpt, 10 November 2020, p 39(08) – p 40(13).

82. Finally, counsel for the Defendants asked Rhonda about the basis of her assertion that she was named in the Trust Deeds. The following cross-examination is instructive (Tcpt, 10 November 2020, p 40(26–36)):

“Q. Tell me, what truth [sic] do you based the assertion that you were named in the trust deed?

A. Because my mother said to me they had set up it in a family trust. I knew there was Fred Goldspring and Sons Family Trust. I knew that from the very get go of it. I knew that when she said they were, they’d built, put it into a family trust. It was so that it could be developed and it was for the benefit of us all, for the seven children. Going back to 94, mum’s will in 94, she had shown me that will and it was a seven-way split, one company noted, Fred Goldspring and Sons. Mum was upfront and she always about what was going on. You’re forgetting, when I was at, at home I used to write up the books with mum and she explained to me how it was done.”

83. In many respects the answers given by Rhonda were internally contradictory. An obvious example is the evidence given by Rhonda as to when she first discovered the existence of the Trusts the subject of the proceedings. She said first (Tcpt, 10 November 2020, p 25(20–26)):

“Q. Do you agree that you first became aware of the four trusts the subject of these proceedings when you read your mother’s will?

A. Could you repeat that?

Q. You first became aware of the four trusts when you read your mother’s will; that’s the case, isn’t it?

A. Yes.”

84. Yet, she later said (Tcpt, 10 November 2020, p 40(15–21)):

“Q. You’d agree that the first time you became aware of the existence of any trust was when you read your mother’s will?

A. No, when we were at home, when I was at home--

Q. Sorry--

A. No, I disagree to that. I knew there was family trusts and I knew we were named.”

85. Katherine, the first Plaintiff, was also cross-examined at some length.

86. She, like Rhonda, accepted that from 1999 a schism had formed in the family, with, eventually at least, the three Plaintiffs being united on one side of that divide: Tcpt, 10 November 2020, p 42(44) – p 43(19). Unlike Rhonda, however, Katherine maintained that she would speak to Nita regularly, even after 1999: Tcpt, 10 November 2020, p 44(20–28), p 46(35–50).

87. Counsel for the Defendants then took Katherine to her evidence of the conversation with Nita where they were said to have discussed the Harpers Hill property. The conversation occurred, on Katherine’s account, in about September 2006 in the front garden of Nita’s house. It began with Katherine raising with Nita whether she might like to purchase a caravan. This prompted Nita to explain the purchase of the Harpers Hill property and the notion that all of the children would benefit from a subdivision: Tcpt, 10 November 2020, p 47(02) – p 48(29). Katherine denied, when it was put to her, that the evidence about the conversation concerning a caravan was an embellishment concocted in the witness box: Tcpt, 10 November 2020, p 49(04–10).

88. Katherine gave evidence that this was but the first time that Nita spoke to her about the Harpers Hill property and that they had spoken about it “many times”: Tcpt, 10 November 2020, p 48(03–42). The following exchange then occurred (Tcpt, 10 November 2020, p 48(44) – p 49(02)):

“Q. Do you agree from what you knew that the development of Harpers Hill was dependent upon the exertion of time and effort by your brothers, Mark and Peter?

A. They were going to do it, yes.

Q. And they were going to do it for reward, that's the case isn’t it?

A. Well it was to be split between seven of us, Mr Allen. That’s what my mother said and that was my argument with my mother ‘Why worry about us?’.”

89. There was no other suggestion that Nita had ever said that “it was to be split between” the seven children.

90. Her evidence about whether either of Frederick, or Nita, had ever discussed the Trusts with her was vague and, I thought, somewhat evasive. Katherine consistently maintained that she “wasn’t interested” in any of the Trusts or the companies: Tcpt, 10 November 2020, p 49(39) – p 50(14). In light of that evidence, it was put to her (Tcpt, 10 November 2020, p 50(16–32)):

“Q. A reason your evidence about your mother mentioning Harpers Hill being a fabrication is because the conversation occurred in 2006 and it was not of interest to you what your mother was doing with Harpers Hill?

A. No, it was an interest because mum told us that there'd be seven of us, yeah. We had a bit of a laugh about it.

Q. And these proceedings are just brought because you think because there’s seven siblings each sibling should be a participant in the four trusts?

A. Well we knew we were in - we knew we were on trusts Mr Allen. We knew we were on trusts. My mother always made it very clear to us that it was a seven-way cut with everything bar the trucking business.

Q. That evidence you know to be false, that’s the case isn’t it?

A. Sorry, repeat that again?

Q. That evidence is a fabrication isn’t it?

A. No it isn’t.”

91. The source of the knowledge “we were on trusts” was not disclosed and was clearly inconsistent with the way in which counsel for the Plaintiffs had argued their case.

92. Katherine accepted that Nita had never provided her with a copy of any Trust Deed, and that she had never received any money from the Trusts. She also accepted that the first time she had learnt about the existence of the Trusts was when she read Nita’s Will: Tcpt, 10 November 2020, p 49(28–37).

93. Counsel for the Defendants then cross-examined Katherine on a number of matters going to her credit. He referred her, first, to the related family provision proceedings (in which Katherine was a Plaintiff) which had settled. It was clear that Katherine was disappointed with the outcome of the settlement, but she denied that the present proceedings were “another bite at the cherry”: Tcpt, 10 November 2020, p 51(31–44).

94. He also referred to judicial advice proceedings, commenced by the executors of Frederick’s Will and Codicil, in relation to Katherine’s right of first refusal, under that Codicil, to purchase Fred’s interest in a commercial building known as the Lowe’s building. Having gone through the events relevant to those proceedings, the following exchange occurred (Tcpt, 10 November 2020, p 56(44) – p 57(34)):

“Q. Do you agree with this timeline, you exercised the first right of refusal, the executors sought judicial advice, you opposed to giving of judicial advice, the executors got judicial advice that they could act upon the valuation provided by you, the executors asked you to complete the sale or purchase of the property, and then you decided not to go through with the purchase?

…

Q. The question Mr Allen asked you was you told them you were going to go ahead, they got advice, and then you decided you weren’t going to go head. That’s what Mr Allen put to you. Is that correct?

A. Yes, at - yes, at the end, yep.”

95. Following those proceedings, the executors sought an order for the sale of the property, an order which Katherine opposed. She agreed that she was ordered to pay the costs of the proceedings and that she had paid those costs following an unsuccessful appeal from the costs assessment: Tcpt, 10 November 2020, p 58(09) – p 59(24).

96. Finally, counsel referred Katherine to a notice of motion for contempt against the executors filed in related Probate proceedings. She accepted that one of her complaints, ventilated in that notice of motion, was that the executors did not paginate the pages in the accounts provided. She denied that she was “nitpicking”: Tcpt, 10 November 2020, p 59(26–44).

97. Based on the above, counsel for the Defendants put to Katherine that she wanted to take every single point against Marianne, and that these proceedings were brought because of the animus held towards Marianne. Katherine denied those assertions as put: Tcpt, 10 November 2020, p 59(46) – p 60(02). It seems to me that the denial was unlikely to be wholly true.

98. A matter that also does Katherine no credit was the way in which she described members of her extended family. I have already referred to her description of Marianne as “evil”, and, in addition to that, she referred to Marianne’s son as “drug-affected” and “an animal”: Tcpt, 10 November 2020, p 60(10–23).

99. In the present case, there are a number of reasons to doubt the evidence given by the two Plaintiffs. These reasons include:

1. The conversations alleged to have occurred with Nita occurred over 12 years ago.

2. There is no contemporaneous written record corroborating that the conversations occurred.

3. The conversation with Rhonda occurred in circumstances which seem highly unlikely. The evidence was that Nita and Rhonda had spoken only once in about seven years before the alleged conversation. That the conversation occurred on the second occasion that they did speak after that length of time, on such a topic, is highly implausible.

4. After the alleged conversations, neither of the Plaintiffs was given any information, news, or notice, concerning any of the Trusts, including, for example, distributions of trust capital or income.

5. There is no evidence that either sought such information from Nita or Frederick following the conversations alleged. No doubt, there were many opportunities to seek information about the Trusts during the life of Frederick and/or Nita.

6. Despite the denials, it seems more likely that each only discovered the existence of the Trusts after Nita had died in 2008 and only then because the Trusts were mentioned in her Will.

7. Whilst there was some evidence that Nita was one of the appointors of one of the Trusts, there was no evidence that she was one of the settlors or that she had any authority in relation to any of the Trusts.

8. There is no evidence that any distributions have been made to any of the Plaintiffs for her benefit, either before, or after, the death of Nita and/or Frederick (which might support the conversations).

9. I was not impressed with either of the Plaintiffs who gave evidence. I have referred to some of the evidence of each earlier in these reasons. Some of the evidence given was inconsistent with the way in which their solicitor and counsel had advanced the case.

100. Put simply, I do not find an actual persuasion that the conversations, or the effect of any such conversations relied upon by the Plaintiffs, occurred on the balance of probabilities. In reaching this conclusion, whilst bearing in mind that none of the Defendants has given evidence, it was not suggested that any of them were present during the conversations relied upon.

A more detailed summary of the submissions

101. The Plaintiffs submitted that in relation to each of the Trusts, which came into existence at the instigation of Frederick and Nita prior to 23 June 2007, in the absence of the production of the original Trust Deeds together with any amendments thereto, the Plaintiffs cannot determine whether or not, following the Deeds of Retirement and Appointment of Trustee, dated 30 June 2008, the original Trust Deeds were amended to remove them as beneficiaries of Fred Goldspring & Sons Family Trust; The Goldspring Investment Trust; Goldspring Family Trust; and/or Goldsprings Pipelines Australia Trust.

102. It was submitted, although the evidence does not appear to substantiate the submission, that the Goldspring Investment Trust and the Goldspring Family Trust have significant assets, and that the former trust is the beneficial owner of the Kyle Street Property, which is the principal place of business of many of the Goldspring group of companies, including Goldspring’s Earthmoving & Haulage Pty Ltd, Goldspring’s Developments Pty Ltd, and others. The Kyle Street Property, therefore, is the location from which the majority of the Goldspring companies operate its respective business.

103. There is in evidence, a copy of an Application to Record New Registered Proprietor pursuant to s 12(4) of the Trustee Act: Affidavit, Katherine Mary Jordan, 24 August 2019 at annexure E. The form shows that the Kyle Street Property, and others, were transferred from Goldspring Investments Pty Ltd to Investments. It seems, therefore, that the property was held on trust (given the references to s 12(4) of the Trustee Act), and it might be inferred that it formed an asset of the Goldspring Investment Trust.

104. Three issues were said to arise with respect to each of the Deeds of Appointment and Retirement of Trustee, which the Plaintiffs asserted require disclosure and examination in order to ascertain whether any of those Deeds was valid and effective. These are:

1. Whether the powers expressed in the recitals to each of those Deeds were valid and effective;

2. Whether the powers of appointment and/or their “passing” were valid and effective; and

3. Whether the new Trustees thereafter amended the Trust Deeds and whether any such amendments were within power.

105. It was submitted that, in the absence of the original Trust Deeds, each Deed of Appointment and Retirement of Trustee and any original amendments thereafter made to the Trust Deed, together with each and every document relied upon, the Plaintiffs are foreclosed from determining whether they have been removed as beneficiaries of those Trusts and whether or not their removal was within power.

106. The Plaintiffs submitted that each of the Deeds of Retirement and Appointment of Trustee, dated 30 June 2008, contained recitals regarding the appointors contained in the original Trust Deed and the “passing of the powers of appointment” to Peter and Mark. In the absence of the original Trust Deeds and/or documents evidencing the retirement or passing of the powers of appointment, none of the propositions contained in those Deeds can, at present be inspected or tested. They also submitted, that by each of the Deeds of Appointment and Retirement of Trustee Peter, Mark and Marianne have assumed complete control over each of the Trusts.

107. Each of the Plaintiffs was, therefore, entitled to the orders sought in the Summons to allow her to determine whether, prior to 30 June 2018, she was a beneficiary of each Trust created by her parents, and whether, if removed, after that date, that removal was within power.

108. It was also submitted that the inherent jurisdiction of the Court may be invoked to enable the Plaintiffs to determine whether each is a beneficiary and whether each remains a beneficiary of any of the Trusts. In addition, if each of the Plaintiffs was, or is, a beneficiary of each of the Trusts, she is entitled to receive the accounts of the Trust for each and every Trust of which she is, or has been, a beneficiary as sought in the Summons, the production of each of those documents all falling within the conventional description of “Trust documents”.

109. The Defendants submitted that none of the Plaintiffs actually alleged that she was a beneficiary of one, or more, of the Trusts. Each alleged that she wishes to find out whether she is. Thus, until such time as she is able to prove that she is, there is no jurisdictional basis for the Court to compel the trustees to disclose a trust deed to enable the Plaintiffs to satisfy themselves that they are, or are not, beneficiaries. There is no discretion to exercise if the person asking for access has not proved that she is a beneficiary.

110. Thus, it is submitted that the Plaintiffs have no standing, and the amended Summons ought to be dismissed.

111. As to the evidence of the conversations with Nita that is relied upon, the conversations allegedly occurred 14 years ago, the import of which, according to the Plaintiffs, if accepted, is that they could be beneficiaries of one of the four trusts. As will be read, I have found it difficult to accept the evidence of those conversations.

112. No issue of laches was raised. However, earlier proceedings, involving a claim for a family provision order were pointed to, and it was submitted: that whether there were trusts, the nature and value of the corpus of the trusts, and who were the beneficiaries, were live issues; that, in those proceedings, it was the appropriate time to litigate the issue, because an appreciation of the trusts was essential to the proper resolution of those proceedings; and that even if the Plaintiffs were not estopped from now seeking discovery, their failure to do so was a matter informing the exercise of the discretion.

Evidentiary requirements

113. I should also mention something about the burden of proof. I have found a very useful summary of the principles in Miah v Miah [2020] EWHC 3374 (Ch) at [19]–[20] (Judge Mithani QC):

“The burden of proving the facts and matters upon which the Claimants rely in making good their claim … rests upon them. The standard of proof is the usual civil standard of proof: the balance of probabilities. There is no heightened standard of proof simply because allegations of fraud, dishonesty and other serious impropriety have been made by the parties: see the decision of the House of Lords in Re B [2008] UKHL 35 and of the Supreme Court in Re S [2009] UKSC 17.

However, it is appropriate for me to mention one further point about the burden of proof, though in the present context, that point, for the reasons I mention below, is largely academic. Although the primary burden of proof will always lie with a claimant, there may be situations where the onus of proving certain facts and matters on which reliance is placed by a defendant will lie upon the defendant and would also need to be proved on the balance of probabilities. As the editors of Halsbury’s Laws of England (5th Edition, Volume 12, 2015, Civil Procedure), at paragraphs 702 and 704, state:

‘The evidential burden (or the burden of adducing evidence) requires the party bearing the burden to produce evidence capable of supporting but not necessarily proving a fact in issue; the burden rests upon the party who would fail if no evidence at all, or no further evidence, as the case may be, was adduced by either side. It has been said that the evidential burden shifts from one party to another as the trial progresses according to the balance of evidence given at any particular stage, but it may be more accurate to say that it is the need to respond to the other party's case that changes …The evidential burden (or the burden of adducing evidence) will rest initially upon the party bearing the legal burden. However, rather than referring to a shifting burden, it may be more accurate to say that it is the need to respond to the other party’s case that changes as the trial progresses according to the balance of evidence given by each party at any particular stage. If the party bearing the legal burden fails to adduce evidence, he has failed to discharge his burden and there will be no need for the other party to respond; however, if the party bearing the legal burden brings evidence tending to prove his claim, the other party may in response wish to raise an issue and must then bear the burden of adducing evidence in respect of all material facts.’”

114. The phrase “evidential burden” carries a number of different meanings and, consequently, its use often leads to error. In Strong v Woolworths Limited (t/as Big W) (2012) 246 CLR 182 at 201–202 [51]–[54]; [2012] HCA 5 at [51]–[54], Heydon J (albeit in dissent in the result) described three senses in which the phrase could be used. The second sense is the relevant one in the instant case. His Honour stated at [53]:

“In the second sense, ‘evidential burden’ refers to circumstances in which a plaintiff calls evidence sufficiently weighty to entitle, but not compel, a reasonable trier of fact to find in the plaintiff’s favour. There is then said to be an ‘evidential burden’ in the sense of a ‘provisional’ or ‘tactical’ burden on the defendant: if the defendant fails to call any or any weighty evidence, it will run a risk of losing on the issue – that is, a risk that at the end of the trial the trier of fact will draw inferences sufficiently strong to enable the plaintiff to satisfy the legal (ie persuasive) standard of proof. The ‘provisional’ or ‘tactical’ burden raises the question whether a defendant should as a matter of tactics ‘call evidence or take the consequences, which may not necessarily be adverse’.” (citations omitted)

115. See also Prepaid Services Pty Ltd v Atradius Credit Insurance NV [2014] NSWCA 440 at [53]–[55] (Macfarlan JA, Meagher JA and Sackville AJA agreeing); Poricanin v Australian Consolidated Industries Ltd [1979] 2 NSWLR 419 at 424–426 (Hope and Glass JJA).

116. Thus, even though I have come to the conclusion that I am unable to be satisfied about the conversations referred to, or that they have the effect of what was asserted, that may not be the end of the matter. I also remember that in Russo v Aiello (2003) 215 CLR 643 at 647 [11]; [2003] HCA 53, Gleeson CJ wrote, at [11]:

“Lord Mansfield said that ‘all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted’. This is a fundamental precept of the adversarial system of justice, and is treated as axiomatic in the day to day operations of courts.” (citations omitted)

117. And that in Newell; Muriniti v De Costi (2018) 97 NSWLR 398 at 417 [78]; [2018] NSWCA 49, Beazley P (Gleeson and White JJA agreeing), wrote, at [78]:

“The rule in Jones v Dunkel applies where there is an unexplained failure of a party to give evidence or to call a witness. Such failure may have either or both of the following consequences in the fact finding process. It ‘may lead rationally to an inference that the evidence would not help that party’s case’: Jones v Dunkel at 321; Holloway v McFeeters (1956) 94 CLR 470; [1956] HCA 25 at 480–481. It also enables the court more readily to draw an affirmative inference in support of the opposing party’s case: Commonwealth of Australia v McLean (unreported, NSW Court of Appeal, 31 December 1996); Manly Council v Byrnes [2004] NSWCA 123 at [51]; Carolyn Sappideen and Prue Vines, Fleming’s Law of Torts (10th ed, 2011, Lawbook Co) at 13.50.”

118. Where the absent witness is a party, an adverse inference may be more readily drawn against that party: Chong v CC Containers Pty Limited (2015) 49 VR 402 at 464 [212]; [2015] VSCA 137 at [212] (Redlich, Santamaria and Kyrou JJA).

119. In Trkulja v Markovic [2015] VSCA 298 at [95]–[96], Kyrou and Kaye JJA and Ginnane AJA wrote:

“Further, where the absent witness or party is the only person capable of giving evidence on a particular issue in dispute, his or her failure to enter the witness box may attain a particular significance. It has been said that, although the silence of one party cannot fill the place of actual evidence on an issue, it may serve to resolve a doubt or an ambiguity, especially where the facts are peculiarly within the knowledge of the silent party. In these circumstances, a failure to call or give evidence may have more than ordinary significance.

However, there are a number of limitations to the application of the rule in Jones v Dunkel. Relevantly for the purposes of this appeal, the rule does not permit an inference that the evidence not called by a party would have been adverse to the party. The rule also does not enable the absence of a witness to make up for any deficiency in a party’s evidence. The rule will not support an adverse inference unless the evidence otherwise provides a basis on which that unfavourable inference can be drawn. It has therefore been said that the rule cannot be employed to fill gaps in the evidence, or to convert conjecture and suspicion into inference.”

120. Also see Romeo v Papalia [2012] NSWCA 221 at [121] (Sackville AJA, Basten and Campbell JJA agreeing).

121. As stated, the rule in Jones v Dunkel does not permit an inference to the effect that the evidence would have been adverse to the party, only an inference that the evidence would not have assisted the party: Woolworths Ltd v Ryder (2014) 87 NSWLR 593 at 602 [35]; [2014] NSWCA 223 at [35] (Sackville AJA, Ward JA agreeing). What it does do is to authorise “but … not require, a tribunal of fact to engage in two different types of reasoning. One is to infer that the evidence of an absent witness, if called, would not have assisted the party who failed to call that witness. The other is that the tribunal of fact can draw with greater confidence any inference unfavourable to the party who failed to call the witness, if that witness seems to be in a position to cast light on whether that inference should properly be drawn”: Azar v Kathirgamalingan (2012) 62 MVR 462 at 495 [148]; [2012] NSWCA 429 at [148] (Campbell JA, McColl and Basten JJA agreeing); Manly Council v Byrne [2004] NSWCA 123 at [51] (Campbell J, Beazley JA and Pearlman AJA agreeing).

122. Important in this case, is the fact that the natural Defendants appear to be in control of the Trustee of the various trusts. In Re Fairbairn, deceased [1967] VR 633 at 639, Gillard J wrote:

“If the trustees do not choose to put before the Court any information about the documents in their possession, or give any evidence of circumstances to justify their non-production, the Court may be more bold and would more readily draw inferences in favour of the plaintiff as to the contents of the documents than it might otherwise do. From the correspondence which passed between the trustees and the solicitors, it can be inferred that there are some relevant documents. But what they are and what they contain and what justification there may be for their non-production for inspection, the trustees have either failed or refused to inform the Court. These are matters peculiarly within the knowledge of the trustees. I, therefore, find that on the balance of probabilities they do contain information about the trust which the plaintiff is entitled to know.”

123. The passage above is not entirely apposite in the context of the present case, although it does have some relevance. Whether to draw any inference, and also, if there is a discretion to be exercised by the Court in relation to the Plaintiffs’ application for disclosure of documents relating to the Trusts, the approach of the Defendants in failing to give any evidence, and the explanation for that approach, must be evaluated.

The Law

124. During the course of the hearing, the Court asked counsel for the Plaintiffs to identify the basis, or bases, of the relief being sought, in circumstances where there was no evidence that any of the Plaintiffs was a named beneficiary, or a discretionary object, of any of the Trusts, or a person interested in the property subject to a trust, in respect of which Trust Deeds have been sought.

125. Counsel did not refer to UCPR r 54.3 which, relevantly, provides:

(2) Proceedings may be brought for the determination of any question which could be determined in administration proceedings, including—

(a) any question arising in the administration of an estate or in the execution of a trust,

(b) any question as to the composition of any class of persons—

(i) …

(ii) …, or

(iii) having a beneficial interest in property subject to a trust,

(c) any question as to the rights or interests of a person who claims—

(i) …

(ii) …, or

(iii) to be beneficially entitled under a trust.

(3) Proceedings may be brought for an order directing any executor, administrator or trustee—

(a) …

(b) …

(c) …, or

(d) to do or abstain from doing any act.

(4) Proceedings may be brought for—

(a) an order approving any sale, purchase, compromise or other transaction by an executor, administrator or trustee, or

(b) directing any act to be done in the administration of an estate that the Supreme Court could order to be done if the estate were being administered under the direction of the Court, or

(c) directing any act to be done in the execution of a trust that the Supreme Court could order to be done if the trust were being executed under the direction of the Court.

126. Importantly, in relation to the rule referred to, the following should be noted:

1. Its language is broad, referring to “any relief” and “any question”, with a non-exhaustive list of the types of questions that may fall within its scope.

2. There are some limitations on the persons who may apply, being a class of persons having a beneficial interest in property subject to a trust, or in relation to a question as to the rights or interests of a person who claims to be beneficially entitled under a trust. The use of the words “claims to be” suggests that in those types of proceedings a broad approach to standing is adopted.

127. In Victoria, the Court of Appeal, speaking of the equivalent rule, has stated that the provisions “confer extensive power on the Court” and that the “procedure invoked … is … a summary procedure, intended to enable questions arising in the administration of an estate or a trust to be resolved cheaply and simply”: Fast v Rockman [2015] VSCA 61 at [43] (Warren CJ, Santamaria JA and Ginnane AJA); Morris v Smoel [2013] VSCA 11 at [23] (Maxwell P, Whelan JA agreeing).

128. In Viljoen v Hayes [2017] NSWSC 801, Parker J dealt with the utility of UCPR r 54.3 in relation to production of trust documents. His Honour wrote at [14]–[16]:

“The term ‘administration proceedings’ is defined in UCPR r 54.1 as meaning:

proceedings for the administration of an estate, or for the execution of a trust, under the direction of the Supreme Court.

… UCPR r 54(3) is designed to apply both to the administration of the deceased’s estate and to the administration of trusts (indeed the former may be seen as no more than a particular instance of the latter) …

The power under UCPR r 54.3(3) is wide. But it is confined to the proper administration of the trust or estate in question: Gonzales v Claridades (2003) 58 NSWLR 211 at 217-8. The plaintiff must therefore show that the production of the documents in question is an appropriate step to take in the interests of the proper administration of the estate.”

129. The Plaintiffs have pointed to the fundamental aspect of the jurisdiction of a court of equity to supervise, and, in appropriate circumstances, to intervene in, the administration of a trust: Morice v The Bishop of Durham (1804) 9 Ves Jun 399 at 404–405; 32 ER 656 at 658 (Sir William Grant MR); Palmer v Ayres (2017) 259 CLR 478 at 510–511 [84]; [2017] HCA 5 at [84] (Gageler J).

130. As Lady Arden wrote in Lehtimäki v Cooper [2020] UKSC 33 at [43]:

“Equity imposed stringent duties on persons who were appointed trustees of trusts: Lord Eldon is said to have held that these duties were imposed with ‘relentless jealousy’ in order to ensure that trustees fulfilled their duties, and that trustees had to be ‘watched with infinite and the most guarded jealousy’ (see Ex p Lacey (1802) 6 Ves Jnr 625, 626; 31 ER 1228 and note 2 to the report). The words ‘infinite’ and ‘relentless’ aptly indicate the capacity of equity to develop to meet new challenges.”

131. The duties of a fiduciary nature include the “irreducible core” of obligations identified by Millett LJ (Hutchison and Hirst LJJ agreeing) in Armitage v Nurse [1998] Ch 241 at 253–254:

“… there is an irreducible core of obligations owed by the trustees to the beneficiaries and enforceable by them which is fundamental to the concept of a trust. If the beneficiaries have no rights enforceable against the trustees there are no trusts … The duty of the trustees to perform the trusts honestly and in good faith for the benefit of the beneficiaries is the minimum necessary to give substance to the trusts, but in my opinion it is sufficient.”

132. In this regard, what was written by Powell J in Spellson v George (1987) 11 NSWLR 300 at 316 should also be noted. His Honour held that it is not correct to say that the enforcement by the court of a trustee’s obligation to account is dependent upon the cestuis que trust first raising a question of fraud or some other like breach of trust:

“On the contrary, so it seems to me, where the court’s assistance in enforcing the trustee’s obligation to account is invoked, the court should be concerned with only two questions, they being, first, whether the plaintiffs are, or the plaintiff is one of the, cestuis que trust, and, second, whether the defendant trustee has failed to observe his obligation to account.”

133. Thus, his Honour considered the status of the applicant as “cestuis que trust” as being the first question to be answered.

134. The Defendants rely upon what was written in Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405, by Mahoney JA, at 431–432:

“In general, a trustee is not obliged to volunteer documents or information to beneficiaries or possible beneficiaries. However, if a beneficiary requests it, a trustee is in general obliged to provide documents and information to the beneficiary, at his cost, in relation to the trust property and to provide an accounting in respect of the administration of it.

… As at present advised, I doubt that a person whose interest lies not in property but in possibility and is in respect of part but not all of the trust property may demand such information.”

135. At 432, his Honour also expressed doubt whether it is the “duty of a trustee to inform all persons who may possibly take under a discretionary power of the nature and extent of that possibility”. His Honour added, at 436, that it was important in resolving that case to have regard to “the essential nature of … discretionary [trust] [which] … is not a mere commercial document in which the public may have an interest [but] … is a private transaction, a disposition by the settlor of his own property, ordinarily voluntarily, in the manner which he is entitled to choose [and] [s]pecial cases apart, it is proper that his wishes and his privacy be respected.”

136. Sheller JA, at 442, expressed similar concerns.

137. In Kafataris v The Deputy Commissioner of Taxation (2008) 172 FCR 242 at 249–250 [42]–[44]; [2008] FCA 1454, Lindgren J, at [42]–[44], stated that:

“According to the ordinary meaning of the word, a beneficiary is any person for whose benefit a trust is to be administered and who is entitled to enforce the trustee’s obligation to administer the trust according to its terms. It is trite that for every trust there must be a ‘beneficiary’ so understood (see, for example, Re Denley’s Trust Deed; Holman v HH Martyn & Co Ltd [1969] 1 Ch 373 at 382–384). A beneficiary is not simply a person who as a matter of fact obtains some practical benefit from the existence of a trust: Sacks v Gridiger (1990) 22 NSWLR 502 at 508.

The word ‘beneficiary’ reaches beyond a person who has a beneficial interest in the trust property. It is possible for the legal estate in land to be vested in ‘trustees’ without equitable ownership being vested in someone else. The trustees must, however, owe fiduciary obligations in respect of the trust property to persons who, although they may have no interest in the trust property and may never have an interest in the trust property, are called ‘beneficiaries’. In CPT Custodian Pty Ltd v Commissioner of State Revenue of the State of Victoria (2005) 224 CLR 98, the High Court rejected (at [25]):

a ‘dogma’ that, where ownership is vested in a trustee, equitable ownership must necessarily be vested in someone else because it is an essential attribute of a trust that it confers upon individuals a complex of beneficial legal relations which may be called ownership.

That is to say, there can be a trustee who owes fiduciary obligations in respect of trust property to ‘beneficiaries’ without any of the latter having a beneficial interest in the property.

Although the discretionary objects do not have a beneficial interest in any property the subject of a ‘discretionary’ trust prior to a distribution or appointment of income or capital, they are freely referred to as ‘beneficiaries’; see for example, Gartside v Inland Revenue Commissioners [1968] AC 553 at 617–618; R & I Bank of Western Australia Ltd v Anchorage Investments Pty Ltd (1993) 10 WAR 59 at 79; Australian Securities & Investments Commission v Carey (No 6) (2006) 152 FCR 509 at [25]–[28]. Provided it can be said with certainty that any particular person is or is not within the class of discretionary beneficiaries, there is a trust, due administration of which can be enforced by discretionary beneficiaries: see In re Gulbenkian’s Settlements [1970] AC 508; McPhail v Doulton [1971] AC 424.”

138. In Fay v Moramba Services Pty Ltd [2009] NSWSC 1428 at [99], Brereton J (as his Honour then was) wrote:

“A potential beneficiary of a discretionary trust has no entitlement as of right to disclosure of information concerning the trust, except for the trust accounts [Avanes v Marshall (2007) 68 NSWLR 595; Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405; Schmidt v Rosewood Trust Limited [2003] 2 AC 709]. There is doubt even as to whether the object of a discretionary trust has a right to see trust accounts, or whether the Court merely has a discretion, in the exercise of its supervisory jurisdiction over trustees, to order the provision of accounts [Schmidt v Rosewood Trust Limited; contra McDonald v Ellis [2007] NSWSC 1068, and cf Avanes v Marshall in relation to trust accounts where the trust is not discretionary]. But, for present purposes, I shall assume that a potential beneficiary of a discretionary trust is entitled to see the trust accounts.”

139. In Schmidt v Rosewood Trust Limited [2003] 2 AC 709; [2003] UKPC 26, the appellant’s status, as a beneficiary was questionable. At [54], Lord Walker, for the Board, wrote:

“It will be observed that Kirby P said that for an applicant to have a proprietary right might be sufficient, but was not necessary. In the Board’s view it is neither sufficient nor necessary. Since In re Cowin well over a century ago the court has made clear that there may be circumstances (especially of confidentiality) in which even a vested and transmissible beneficial interest is not a sufficient basis for requiring disclosure of trust documents; and In re Londonderry’s Settlement and more recent cases have begun to work out in some detail the way in which the court should exercise its discretion in such cases. There are three such areas in which the court may have to form a discretionary judgment: whether a discretionary object (or some other beneficiary with only a remote or wholly defeasible interest) should be granted relief at all; what classes of documents should be disclosed, either completely or in a redacted form; and what safeguards should be imposed (whether by undertakings to the court, arrangements for professional inspection, or otherwise) to limit the use which may be made of documents or information disclosed under the order of the court.”

140. At [66]–[67], Lord Walker concluded:

“… a beneficiary’s right to seek disclosure of trust documents, although sometimes not inappropriately described as a proprietary right, is best approached as one aspect of the court’s inherent jurisdiction to supervise (and where appropriate intervene in) the administration of trusts. There is therefore in their Lordships’ view no reason to draw any bright dividing-line either between transmissible and non-transmissible (that is, discretionary) interests, or between the rights of an object of a discretionary trust and those of the object of a mere power (of a fiduciary character). The differences in this context between trusts and powers are … a good deal less significant than the similarities …

However, the recent cases also confirm … that no beneficiary (and least of all a discretionary object) has any entitlement as of right to disclosure of anything which can plausibly be described as a trust document. Especially when there are issues as to personal or commercial confidentiality, the court may have to balance the competing interests of different beneficiaries, the trustees themselves, and third parties. Disclosure may have to be limited and safeguards may have to be put in place. Evaluation of the claims of a beneficiary (and especially of a discretionary object) may be an important part of the balancing exercise which the court has to perform on the materials placed before it. In many cases the court may have no difficulty in concluding that an applicant with no more than a theoretical possibility of benefit ought not to be granted any relief.”

141. At [51], Lord Walker, had referred to “the court’s inherent jurisdiction to supervise, and if necessary to intervene in, the administration of trusts”. Yet, what was written at [51] “is not to suggest that a court has some freewheeling unfettered discretion to do whatever seems fair when it comes to trusts”: Crociani v Crociani [2014] UKPC 40 at [36] (Lord Neuberger for the Board). However, what is clear is that the court does have a power to supervise the administration of trusts, primarily to protect the interests of the beneficiaries.

142. In Wright v Stevens [2018] NSWSC 548, I considered the two streams of authority concerning the entitlement of a discretionary object to access documents of the Trust. Without repeating the analysis I undertook in that case, I concluded that the “discretionary approach”, as favoured in the Privy Council’s advice in Schmidt v Rosewood Trust Limited, was the correct approach: at [252]–[286].

143. Yet reliance upon Schmidt v Rosewood Trust Limited, as counsel for the Plaintiffs sought to do, assumes a conclusion reached upon the relevant issue in this case, namely, whether the Plaintiffs are beneficiaries or discretionary objects, or within a class of beneficiaries or discretionary objects, or persons interested in the property subject to a trust.

144. A mere stranger to a trust cannot assert an entitlement, in equity, to inspect or obtain the documents of the trust. Albeit in a slightly different context, Sir John Romilly MR was reported to have said in Wynne v Humberston (1858) 27 Beav 421 at 423–424; 54 ER 165 at 166:

“I think the Defendant Williams is not entitled to see these documents. There can be no question that the rule is that, where the relation of trustee and cestui que trust is established, all cases submitted and opinions taken by the trustee to guide himself in the administration of his trust, and not for the purpose of his own defence in any litigation against himself, must be produced to the cestui que trust. They are taken for the purpose of administration of the trust, and for the benefit of the persons entitled to the trust estate, who will have to pay the expense thereby incurred.

Setting aside the great singularity of the position of the trustee in this case, who appears to have taken advice to govern his decision, nor regarding the circumstance that one Defendant is applying for discovery against his Co-defendant, but considering the application as one made by a Plaintiff claiming the estate against Humberston as a trustee, still I am of opinion that he is not entitled to see the cases and opinions until a primâ facie case of the relation of trustee and cestui que trust is established. This is simply the case of a claimant who has not made out his title. If Williams is entitled to a production, then any stranger might come and claim the estate and see all the opinions and cases, and a very serious injury might be caused to the persons really entitled to the property. I am of opinion that he is not entitled to see the cases and opinions.”

145. Similar comments were made in several of the speeches of the House of Lords in O’Rourke v Darbishire [1920] AC 581. Lord Parmoor remarked at 619–620:

“A cestui que trust, in an action against his trustees, is generally entitled to the production for inspection of all documents relating to the affairs of the trust. It is not material for the present purpose whether this right is to be regarded as a paramount proprietary right in the cestui que trust, or as a right to be enforced under the law of discovery, since in both cases an essential preliminary is either the admission, or the establishment, of the status on which the right is based. I agree in the view expressed by Peterson J., that the rule as to the right of a cestui que trust to the production of trust documents for inspection does not apply when the question to be tried in the action is whether the plaintiff is a cestui que trust or not. In the present case not only is the status of the appellant as a cestui que trust disputed, but in addition a release was executed, which, unless it can be set aside, is a bar to his claim. It is not necessary to consider on what grounds the release is attacked, but it is obvious that there may be formidable difficulties in the way of the appellant under this head. The attention of your Lordships was directed to various authorities, but it is sufficient to refer to Wynne v Humberston and to Compton v Earl Grey.” (citations omitted) (emphasis added)

146. Lord Wrenbury wrote at 626–627:

“If the plaintiff is right in saying that he is a beneficiary, and if the documents are documents belonging to the executors as executors, he has a right to access to the documents which he desires to inspect upon what has been called in the judgments in this case a proprietary right. The beneficiary is entitled to see all trust documents because they are trust documents and because he is a beneficiary. They are in this sense his own. Action or no action, he is entitled to access to them. This has nothing to do with discovery. The right to discovery is a right to see someone else’s documents. The proprietary right is a right to access to documents which are your own. No question of professional privilege arises in such a case. Documents containing professional advice taken by the executors as trustees contain advice taken by trustees for their cestuis que trust, and the beneficiaries are entitled to see them because they are beneficiaries. The first case in Talbot v Marshfield is an instance.

But this plaintiff cannot as matters stand say that he is a beneficiary. That is the very question to be determined in the litigation.

…

In this state of facts the plaintiff cannot assert a proprietary right to the documents on the footing that they are his, and cannot enforce inspection on that ground. If authority be needed Wynne v. Humberston is clear authority upon the point.” (citations omitted) (emphasis added)

147. As would be apparent, Lord Wrenbury’s reference to the “proprietary right” of a beneficiary to trust documents is at odds with what was later said by the Privy Council in Schmidt v Rosewood Trust Limited. That said, the adoption of the “discretionary approach” over the “proprietary approach” does not diminish the force of Lord Wrenbury’s insistence that the Plaintiffs must establish that they are beneficiaries or discretionary objects, or within a class of beneficiaries or discretionary objects, or persons interested in the property subject to a trust.

148. A similar view was taken by Newey J in Birdseye v Roythorne & Co [2015] EWHC 1003 (Ch) in the context of an assertion of legal professional privilege. Having referred to Wynne v Humberston, O’Rourke v Darbishire and Schmidt v Rosewood Trust Limited, his Lordship wrote at [24]:

“To my mind, however, it must remain the case that a person must, at least normally, establish as a minimum a prima facie case that he is a beneficiary before there can be any question of the Court requiring a trustee or executor to disclose documents which would be protected by privilege if the applicant were not a beneficiary. That view appears to me to derive support from the cases I have mentioned in the preceding paragraphs: Romilly MR spoke of the need for ‘a prima facie case of the relation of trustee and cestui que trust’ in Wynne v Humberston, and in O’Rourke v Darbishire there were references to, for example, the establishment (or admission) of the status on which the right to production was based as an ‘essential preliminary’ and the plaintiff’s inability to make out even a prima facie case that he was a cestui que trust. Further, to require an applicant to show a prima facie case that he is a beneficiary accords with the approach that the Courts adopt where it is suggested that no privilege exists because the relevant document came into existence as part of a fraud (as to which, see e.g. Royscott Spa Leasing Ltd v Lovett [1995] BCC 502, especially at 506, and paragraph 31.3.22 of the White Book).”

149. In Erceg v Erceg [2017] 1 NZLR 320 at 340 [59]; [2017] NZSC 28 at [59], the Court made the following observation:

“The nature of the beneficiary’s interest will also be significant. A named beneficiary or a member of a class such as the immediate family of the settlor, who can be expected to either receive dispositions from the trust or, at least, to be a strong candidate to do so, will have a far more compelling case for disclosure than, say, a charitable institution that is within the category of institutions to which a disposition could be made but has no other association with the trust.”

150. With reference to some of the authorities to which I have referred, the learned editors of Lewin on Trusts (20th ed, 2020, Thomson Reuters) at [21-097], wrote under the heading “Doubtful beneficiaries”:

“Normally a person seeking disclosure under the trust supervisory jurisdiction must establish that he is entitled to the interest or rights which he claims to have under the trust concerned. Where his interest or rights are yet to be established, the claimant may, in the litigation or prospective litigation seeking to establish the interest or rights, obtain disclosure of documents or information relevant to his claim to the extent permitted by rules of court, but not normally disclosure under the trust supervisory jurisdiction. The claimant must, in order to invoke the supervisory jurisdiction, at least normally, establish as a minimum a prima facie case that he is a beneficiary before there can be any question of disclosure of documents which are protected from disclosure for litigation purposes, for example by legal privilege, but not necessarily under the trust supervisory jurisdiction. But where the claimant has indisputably been a beneficiary in the past, though there is a dispute whether he remains a beneficiary, the court may, exceptionally, order disclosure in relation to the period as to which his status as a beneficiary is in dispute, for instance where the dispute turns on the outcome of foreign litigation in which he has been successful though further appeals remain a possibility and it may be many years before the identity of the beneficiaries has been finally determined.” (citations omitted)

Determination

151. It seems to me, bearing in mind all of the above, the question that the Court should ask is whether there is a reasonable basis, beyond speculation, for concluding that the Plaintiffs have established, at least prima facie, that they are beneficiaries or discretionary objects, or within a class of beneficiaries or discretionary objects, or persons interested in the property subject to a trust.

152. The matter is then governed, at present, by what was written in Hartigan Nominees Pty Ltd v Rydge. If the Plaintiffs have not established, even a prima facie case, that any one of them is within any of those classes, then they are not entitled to the relief sought.

153. In this regard, it is important to observe that none of them had, during the lifetime of Frederick and/or Nita received any information about any of the Trusts; had not received any distributions from any of the Trusts; and that none of them had been involved, by Frederick and/or Nita, in any of the Trusts. Further, as I have found above, the evidence of each of the two Plaintiffs of their conversations with Nita, is not plausible.

154. Were those the only matters of relevance in the determination of the Plaintiffs’ case, it might well have been the end of the matter. However, as family members, it could be expected that they would be named as beneficiaries or discretionary objects, or within a class of beneficiaries or discretionary objects, or persons interested in the property subject to a trust, in one, or both, of the two Trusts that include the word “Family” in the name of the Trust.

155. Whilst, plainly, there was acrimony and estrangement within the family, it was not total, at least as between Frederick or Nita and the Plaintiffs. So much is evident from Clause 12 of Frederick and Nita’s Wills which divided the residue of his, and her, estate, respectively, equally between their children in the event that she, or he, did not survive the other. Provision of this kind being made in each Will demonstrates that, whatever acrimony remained, it was not sufficient to cause Frederick, or Nita, to exclude, completely, any of the Plaintiffs as claimants on his and her testamentary bounty.

156. The Defendants’ almost complete silence has left unanswered the questions posed by the fact that two of the Trusts, being the Goldsprings Family Trust and the Fred Goldspring & Sons Family Trust, contain the word “Family” in its name. In circumstances where the Plaintiffs are members of the immediate family of Frederick and Nita, and, indeed, of the natural Defendants, this seems to me to be sufficient, although barely so, to establish a prima facie case that the Plaintiffs would be expected to be named as beneficiaries, or discretionary objects, or within a class of beneficiaries or discretionary objects, or as persons interested in the property subject to those two Trusts. Successful concealment of the particular Trust instruments could preclude enjoyment of any interests of those persons in the trust property.

157. That the Defendants appear to be asserting an entitlement to carry on the administration of the Trusts in secret, in the sense of without any supervision and without accountability, makes the case for disclosure more compelling. The presentation of their case is pregnant with the suggestion that they should be allowed to carry on the administration of the two Trusts in that way. Their failure to disclose, in any affidavit, read in the proceedings, matters of significance, which could not be confidential, concerning the Trusts, and to not read any affidavits, thereby not exposing any Defendant to cross‐examination, is also a relevant consideration.

158. In my view, conducting the two Trusts in that way should not, necessarily, be allowed to continue. Submitting, somewhat disingenuously, bearing in mind the way the case has proceeded, that the only questions for determination are whether the Plaintiffs have the standing to bring the application that is brought, is not an entire answer to the issues to be determined.

159. Of course, the establishment of a prima facie case does not entitle the Plaintiffs, as they sought in the Summons, to all financial accounts for those two Trusts. Without an examination of the two Trust Deeds, and any later Deeds of Variation in respect of those two Trusts, it cannot be said, with absolute certainty, that any of the Plaintiffs are beneficiaries or discretionary objects, or within a class of beneficiaries or discretionary objects, or persons interested in the property subject to a trust, and whether they are entitled to inspection of any further documents.

160. I have come to the conclusion, therefore, that the documents, inspection of which should be permitted, are those referable only to the Trust instruments of each Trust in which the word “Family” appears in the name of the Trust, being the Goldsprings Family Trust and the Fred Goldspring & Sons Family Trust. As sought in the Summons, this means the following documents:

1. The Trust Deed, dated 1 June 2006, establishing the Goldsprings Family Trust;

2. The Deed of Variation, dated 30 June 2008, relating to the Goldsprings Family Trust;

3. The Trust Deed, of date unknown, establishing the Fred Goldspring & Sons Family Trust; and

4. Any other Deed of Variation, of date between 1 June 2006 to the date of these orders, which had the effect of varying the terms of either the Goldsprings Family Trust or the Fred Goldspring & Songs Family Trust.

161. In relation to the costs of the proceedings, I have not heard submissions, but my tentative view is that the determination of how costs of the application should be borne should await the inspection of the relevant documents and the final determination of the question whether the Plaintiffs, or any of them, are beneficiaries or discretionary objects, or within a class of beneficiaries or discretionary objects, or persons interested in the property subject to a trust. If they are, the Defendants should be ordered to pay the Plaintiffs’ costs. If the Plaintiffs, or any of them, are not beneficiaries or discretionary objects, or within a class of beneficiaries or discretionary objects, or persons interested in the property subject to a trust, then the Plaintiffs should be ordered to pay the Defendants’ costs.

161. The Court:

1. Orders that by 5 February 2021, the Defendants are to permit the Plaintiffs, by their legal representatives, to inspect a copy of:

1. The Trust Deed, dated 1 June 2006, establishing the Goldsprings Family Trust;

2. The Deed of Variation, dated 30 June 2008, relating to the Goldsprings Family Trust;

3. The Trust Deed, of date unknown, establishing the Fred Goldspring & Sons Family Trust; and

4. Any other Deed of Variation, dated between 1 June 2006 and the date of these orders, which had the effect of varying the terms of either the Goldsprings Family Trust or the Fred Goldspring & Sons Family Trust.

2. Stands over the balance of the proceedings to 9:30 a.m. on Thursday, 18 February 2021, for the purpose of determining whether any further orders are necessary and to consider how the question of costs should be determined.

**********

Amendments

04 March 2021 - [99] Replaced "Defendants" with "Plaintiffs".

Decision last updated: 04 March 2021