Spellson v George

Spellson v George (1987) 11 NSWLR 300

It is one of the core “irreducible core obligations” of a Trustee to account to the persons (ie beneficiaries) for whose benefit the Trustee holds the trust property (Refer to Manning v Federal Commissioner of Taxation [1928] HCA 9;(1928) 40 CLR 506 at 509 per Knowx CJ).

That being so the Trustee is obliges not only to keep proper accounts and allow any beneficiary (cestui que trust) to inspect  them, but the Trustee must also, on demand, give the beneficiary information and explanations as to the investment of, and dealings, with trust property { see re Tillott; Lee v Wilson [1892] 1 Ch 86, Gartside v Inland Revenue Commissioners [1968] AC 553 at 605-606 and Ford and Lee, Principles of the Law of Trusts (1983) at 404}.

Powell J at said at pp316:

“This being the essential nature of the position of the trustee, and the liability to account being an essential ingredient in it, it seems to me that it is inescapable, that the cestuis que trust, or any one of the cestuis que trust (ie beneficiary), have, or has, a correlative right to approach the Court for its assistance in enforcing the personal obligation of the trustee, and, in particular, in enforcing the trustee’s obligation to account. Since that right is, as it seems to me, a fundamental right of the cestuis que trust (ie beneficiaries), it seems to me that it is not correct to say that its enforcement by the court is dependent upon the cestuis que trust, or the sestui que trust in question, first raising an allegation, or establishing a prima facie case, of fraud or some other 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 courts 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.”

Case cited in:

Phillip Allan Yates and (6) Ors v John Norman Phillips Halliday [2006] NSWSC 1346

 

 

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