Beneficiaries Denied Information About Their Own Trust

Summary

The High Court has clarified the essence of a beneficiary's right to information about a trust. In surprising circumstances, trustees had denied that the Court could intervene and even that those requesting information were beneficiaries.

Facts

Ernest and Gladys Tamplin had bought Panteg Farm in Glamorgan in 1951. They had six children.

Gladys became sole owner on Ernest's death in 1985.

A year later she entered into two deeds, which created a trust of the farm for her (50%) and her six children (50%). The deeds named certain of her children as the trustees.

One of the deeds provided that the beneficiaries of the trust should hold their interest in the farm 'for their own use and benefit absolutely and for them to devise bequeath or appoint during their lifetime or in their will as they individually shall decide.'

Gladys died in 1988 leaving her 50% share in the farm to the couple's six children. Four of the siblings have since died without leaving wills. This leaves Edward and Jane who, together with Edward's son Mark, are the trustees.

Hugh and Rhys Lewis, and Sadie Lougher, children of deceased siblings asked the trustees for details of their late parent's trust interests, which passed to them (they assumed) under the rules of intestacy. The trust information they requested included any legal advice given to the trustees, correspondence with professional advisers, agreements made with potential developers and trust accounts.

Surprisingly, the trustees argued that Hugh, Rhys and Sadie were not beneficiaries. They argued that the effect of wording in one of the deeds (quoted above) is that interests in this trust could only be transferred actively, ie by lifetime transfer or by will, not under the rules of intestacy. Therefore, the interests of the deceased siblings fell back into the trust, for their surviving siblings and not their children.

Eventually, the trustees conceded that their interpretation of the deeds was wrong and the children had inherited their parent's trust interests. However, they only provided limited information about the trust so Hugh, Rhys and Sadie applied to the Court.

The proceedings

In February 2017 they issued an application under the Civil Procedure Rules for pre-action disclosure of the trust information they had requested (ie disclosure between potential litigants before any proceedings are started).

In November 2017 they also issued a claim on the basis of their rights as beneficiaries in trust law...