Trustees' disclosure to beneficiaries

Contentious Trusts & Estates
1

Lewis v Tamplin [2018] EWHC 777 (Ch) is an interesting decision on a demand from beneficiaries for information about the trust, in which the court took a dim view of the trustees’ refusal to provide information. Points covered:

  • at [44]: the court will not be satisfied merely by the trustees’ say-so that the beneficiaries already have adequate information;
  • at [47]: the Londonderry principle - protecting trustees from disclosing their reasons - does not apply to the exercise of administrative rather than dispositive powers (though what about Wilson v. Law Debenture Trust Corp. plc [1995] 2 All E.R. 337?);
  • at [59]: trustees cannot set up legal professional privilege against beneficiaries for advice obtained on behalf of the trust; and
  • • at [61]: “information which is not in documentary form is more difficult. For one thing, it is clear that beneficiaries are not entitled to throw the costs of assembling information not already in documentary form on the trust generally. They must pay for it themselves: Re Bosworth (1889) 58 L.J.Ch. 432”.

There are also comments on Saunders v. Vautier (at [39], [46]) and pre-action disclosure (at [72]ff).

Nicholas Le Poidevin, Q.C.
New Square Chambers

2

As a general rule the costs of litigation for the benefit of a trust are paid out of the trust fund. However, trustees will be denied their costs out of the trust fund if they have acted in breach of trust or unnecessarily. One protection available to trustees is to make a ‘Beddoe application’, which is an application to the Court for directions whether or not the trustee should bring or defend proceedings in his or her capacity as trustee. This procedure requires the trustee to make full disclosure of the strengths and weaknesses of his or her case. The extent to which sensitive information must be disclosed to the beneficiaries is explored in Glasgow Harley Trustee v McLaughlin.

See further: