Beneficiaries of a family trust are entitled to copies of the trust deed and trust financial statements, they do not first have to prove any breach of trust by trustees, the Court of Appeal ruled in a case where one sister is looking to identify funding for assets valued at over $17 million dollars in November 2002 held in a trust controlled by her sibling.
Prudence Addleman was surprised to learn in 2002 that she was the beneficiary of a family trust. This when receiving a cheque for $4.25 million and being told this was her full entitlement under the trust. Trustees refused to provide any further information, other than later providing a copy of the trust deed. After getting lawyers involved, she was told she was a discretionary beneficiary under a trust established with funds received by her sister Annette Jamieson as compensation for an accident in the 1970s when Annette was a teenager and left as a quadriplegic. Disclosure of further information was refused; Annette was entitled to her privacy, trustees said.
Prudence was entitled to more information, the Court of Appeal ruled. Annette’s compensation was in 1990 put into a family trust called the Lambie Trust, used primarily for property development including the development of a 42 hectare block of land near the Auckland suburb of Howick. Nominal settlor of the Lambie Trust was a cousin, property developer Robert Palmer. It was unlikely that Annette’s compensation was sole source of funds for the Howick development, said the Court of Appeal. With Annette’s one million dollar compensation payout being used for ongoing medical support and also used to buy houses in both London and later the United States, there would be insufficient free funds sourced from Annette’s compensation to finance large-scale property development. She currently lives in Australia; Prudence lives in England.
The Lambie Trust could not be categorised as a ‘sole purpose’ trust for the benefit of Annette alone, the Court of Appeal said. Funding apparently came from sources other than Annette’s compensation. Annette is not the sole trust beneficiary. Sister Prudence was entitled to more information. Prudence is now aged 70; Annette 66. They are the only two named as final beneficiaries of the Lambie Trust remaining alive. They have been estranged for the past twenty years.
Addleman v. Lambie Trustee Ltd – Court of Appeal (4.10.19)
19.177