Many legal minds making NZ LAW work

We are an association of independent legal practices, proactively sharing ideas and expertise for the benefit of our clients.

Beneficiaries' entitlement to trust information

Published: 23rd September 2016

Author: Kimberly Lawrence, Greg Kelly Law Ltd

Published in: Trust e.Speaking | Issue #23

A frustration for trustees

The extent of a trustee’s obligation to provide information to beneficiaries has been a continuing source of frustration for trustees, particularly those whose discretionary decisions may be challenged. Recently the Court of Appeal clarified the nature and extent of this obligation, and the beneficiary’s corresponding rights.

Ivan Erceg, the bankrupt brother of the late Michael Erceg (the owner of Independent Liquor), recently took his quest for disclosure of trust information to the Court of Appeal.[¹] He requested information relating to two trusts established by Michael Erceg, which were wound up in December 2010. No distribution had been made to Ivan. When Ivan was discharged from bankruptcy he requested that the trustees give him documents about the winding up of the trust and distribution of the assets. The trustees, in the unenviable position of having to decide whether to give a potential troublemaker ammunition, refused this disclosure. Ivan then applied to the court for orders demanding extensive information. The High Court refused his application, and the Court of Appeal upheld this result.

The Court of Appeal observed, amongst other things, that there is no presumption for or against disclosure of trust information. Each case will turn on its facts. However, it found the following factors should influence trustees’ decision-making when deciding what, if any, information should be disclosed to a beneficiary:

  • Issues of personal or commercial confidentiality
  • The nature of the beneficiary’s interest
  • The competing interests of the beneficiary seeking disclosure, and those of the trustees and the other beneficiaries
  • Whether disclosure can be in full or in part (that is, in redacted form)
  • Whether safeguards are required on the use of information (for example, agreements about confidentiality)
  • The effect of disclosure on family relationships and the relationship between the applicant and trustees, and
  • The nature and the context of the application for disclosure.

Independent advice

Where the trust is large or significant decisions are to be made, it may be wise for trustees to get independent advice about disclosure. Often agreement can be reached between the beneficiary and the trustee about appointing an independent person to consider the information that is to be disclosed. Trustees may also apply to the High Court for directions. However, there can be significant cost in doing this, so it should usually be a last resort.

New legislation

Beneficiaries’ rights to trust information have become so important that the Law Commission’s proposed new Trusts Act addresses the issue. The proposed legislation will create a presumption of disclosure to ‘qualifying beneficiaries’, who include any beneficiary who the trustees believe the settlor intended to have a realistic possibility of receiving trust property. Trustees will be required to notify such beneficiaries that they are beneficiaries of the trust, and the proposed Act creates a presumption in favour of disclosure. The list of factors the trustees must consider when deciding whether, and to what extent, to disclose information is very similar to that laid out by the Court of Appeal in Erceg v Erceg.

The Supreme Court has granted leave for the Erceg case to be appealed.[¹] However, depending on when a new Trusts Act is passed, the effect of the Supreme Court decision may be short-lived.
The issue of beneficiaries’ rights in relation to trust property is controversial. If trustees are uncertain about what they should disclose to beneficiaries, it would be wise to seek professional advice.

[1] Erceg v Erceg [2016] NZCA 7; [2016] 2 NZLR 622

Related Articles

  • Auckland
  • Bay of Plenty
  • Canterbury
  • Coromandel
  • Gisborne
  • Hawke's Bay
  • Kapiti Coast
  • Manawatu - Wanganui
  • Marlborough
  • Nelson
  • Northland
  • Otago
  • Southland
  • Taranaki
  • Waikato
  • Wairarapa
  • Wellington
  • West Coast

Mike Lucas Law

We are a small law firm based in the business hub of Manurewa, South Auckland, New Zealand.

We are delighted to have many clients in Manurewa and Manukau City, as well as in the wider Auckland region and New Zealand and abroad.

We think the best evidence of the value we add comes from our clients themselves. Our nomination and final position as First Runner up of the highly competitive and prestigious Regional Law Firm of the Year Award 2007 depended on our clients' endorsements of our work.

Region: Auckland

Phone: 09 269 2844

Rejthar Stuart Law

A long established law practice providing comprehensive and specialised legal advice and services to a diverse range of commercial and private clients.

Established in 1997 the firm has grown over the years to become a two solicitor, two legal executive firm representing both private and commercial clients.

Region: Bay of Plenty

Phone: 07 577 6565

Argyle Welsh Finnigan

Argyle Welsh Finnigan is a leading law firm in Ashburton,  the town servicing mid Canterbury, New Zealand.

The firm employs a team of over 25 legal professionals, including three Senior Associate Solicitors, three Staff Solicitors and five Legal Executives.  Our firm provides quality legal services with a commitment to our clients and to understanding their individual needs and requirements. 

With more than one hundred years of combined legal experience, we are able to offer prompt and professional advice on a wide range of legal matters.

Region: Canterbury

Phone: 03 308 8228

Purnell Lawyers

There is nothing as inevitable as change. Since opening for business early last century, we at Purnell Lawyers have seen many changes both in name and in the people who have made up the members of our team. We have been privileged to have served the public throughout all of these times. 

We are confident that we will continue to bring top quality legal services to our clients well into the future.

Region: Coromandel

Phone: 07 868 8680

Woodward Chrisp

At Woodward Chrisp we strive to meet the needs of our clients by providing a wide range of high quality legal services within a supportive and collaborative environment.

Woodward Chrisp is the amalgamation of two long established Gisborne legal firms: Woodward Iles & Co and Chrisp and Chrisp. Today’s partners are Ross Revington, Adam Simperingham, Jeff Allen and Ellie FitzGerald.

Region: Gisborne

Phone: 06 869 0900

NZ LAW Limited

NZ LAW Limited is an association of independent legal practices with member firms located throughout New Zealand. There are currently 53 member firms practising in a wide range of legal disciplines ranging from business law, home buying and selling, immigration law and intellectual property to aviation law and viticulture.

The group was established in 1992 when about five law firms met in Auckland to find a way to benefit their clients by replicating the conviviality and the sharing of ideas and expertise that occurs in larger law firms, but still be able to retain client confidentiality and their own independence.

Region: Hawke's Bay

Phone: 06 835 5299

BMC Lawyers

BMC lawyers has built a reputation for providing quality service and delivering real results. Our strength is our broad-ranging legal experience that gives us the ability to match clients with the right mix of legal skills for their particular needs.

Our legal professionals are passionate about what they do and work alongside a talented team of support and administration staff to make a real positive difference to our clients.”

Region: Kapiti Coast

Phone: 04 296 1105

Dorrington Poole

Dorrington Poole Lawyers has a long tradition in Dannevirke and was founded in 1914 by Percy Dorrington. The firm still acts for families of some of the earliest clients. The long term relationship with those clients gives continuity in a fast changing world.

The firm provides quality legal services within New Zealand for its rural, commercial and private clients. We provide services for clients not only in the Southern Hawkes Bay/Tararua area but also throughout the country.

Region: Manawatu - Wanganui

Phone: 06 374 7089

Wain & Naysmith

Based in Blenheim, Wain & Naysmith Lawyers is a full service law firm, and a powerhouse for property, family and business law.

We pride ourselves in providing clear and cost effective legal solutions and practical advice for you, your family and your business.

Region: Marlborough

Phone: 03 520 6103

Knapps Lawyers

As a firm, we promise to look after you and treat you in a manner that we would expect to be treated by a professional services provider; we promise to use every available legal remedy available to us to resolve your issue and to do what you ask us to do in a timely manner.

We will hold in strict confidence all information that we acquire through our work for you and which concerns your business or personal information.  The only exceptions are where you authorise us to disclose such information or where we must do so by law.

Region: Nelson

Phone: 03 544 7888

Law North Limited

We pride ourselves on being a "general store" for most legal issues but also have several in-house experts in specialised areas including trusts, relationship property, business and property law.  No matter what your issue is - whether you are looking for trusted legal advisers to steer you through life, or you have a one-off problem to sort out - we would be pleased to help.

Law North Ltd provides a broad range of legal services across the Far North district from our base in Kerikeri.   We have operated in the area for over 100 years and have a long-standing history of providing legal services to a diverse client base, including businesses and private clients.   Our directors and their families have been part of the Bay of Islands community for several generations and remain committed to the area and its people.  We often call upon strong local knowledge to resolve issues for clients whilst remaining vigilant about client confidentiality.

Region: Northland

Phone: 09 407 7099

Wilkinson Rodgers Lawyers

Our specialists work together to provide clients with the full range of advice they need to achieve their desired results. If you're looking for specialist knowledge and advice, are a company or individual we can help you by making it easier for you to achieve your objectives.

Our area of expertise include, but not limited to;

  • Commercial
  • Community
  • Family Law
  • Home, Asset & Employment
  • Wills & Estates

Region: Otago

Phone: 03 477 9844

Sheddan Pritchard Law Ltd

Incorporating traditional values and a fresh perspective, Sheddan Pritchard Law is here to assist you with all your legal needs. 

Our friendly and team-driven approach underpins our firm’s values, recognising the importance of putting people first and allows us to connect and nurture professional relationships with new and existing clients within our local community of Gore, as well as throughout New Zealand and extending overseas.

Region: Southland

Phone: 03 209 0030

Welsh McCarthy

Welsh McCarthy practises in Hawera, South Taranaki. Predominant industries in the South Taranaki district are dairy farming, oil and gas. The South Taranaki area also has the largest one-site multi product milk processing facility in the world

We deal with company and commercial transactions, commercial and family law, farm and residential sales and purchases, estate planning and family and charitable trusts. A large part of the firm also deals in the area of family law.

Region: Taranaki

Phone: 06 278 5039

Lamb Bain Laubscher

The firm advises clients on a regional and national level, regularly meeting with clients throughout New Zealand at their places of business or residence. Building on the experience of its members, the firm has forged a successful relationship with its clients, and in some cases act for and advise three generations of the same family.

The firm seeks to create innovative and advantageous solutions based on their knowledge and experience and a keen appreciation of each clients individual circumstances.

The firm has modern internal systems and an infrastructure which enables direct and efficient means of service to clients. There is an emphasis on building strong relationships with our clients and providing a personalised service.

Region: Waikato

Phone: 07 878 1011

Gawith Burridge

Gawith Burridge traces its history back to 1875 when Charles Gawith first set up his practice. Since then the firm has undergone many changes, including a merger between Gawith & Co and Burridge & Co in 1998 to form our current practice.

Our firm draws on the breadth of expertise available from some of the region’s most senior legal practitioners, as well as the skills of those who have moved here from larger corporate environments.

As a result, we provide clients with a comprehensive range of legal services right here in the Wairarapa. We can provide you with legal assistance whether you are an individual or a company, with everything from setting up a Will to selling your farming business. 

Region: Wairarapa

Phone: 06 370 0000

Greg Kelly Law Ltd

Greg Kelly Law Limited is a boutique Wellington law firm specialising in trust and elder law. Our practice areas are wills, estates and trusts.

We act for private and institutional clients establishing and administering trusts, wills and estates. We also provide quality advice to legal and accounting firms in New Zealand and overseas. In particular, we can assist with legal opinions, obtaining and resealing probate, and estate and trust litigation.

Region: Wellington

Phone: 04 499 5193

Hannan & Seddon

The Law Firm of Hannan & Seddon dates back to September 1867.

The firm's offices were in Werita Street from 1867 until 1982 when the firm moved to Tarapuhi Street and then to its current spacious premises at 61 Guinness Street in 1998.

The name Hannan comes from Mr Michael Hannan whose son John Hannan (Jack) joined the firm in 1908. Jack Hannan remained in partnership until he passed away in 1974 at the age of 90!

The name Seddon comes from Mr T E Y Seddon (son of Premier Richard John Seddon from Kumara) who joined the firm in the 1920's. The other prominent Solicitor at Hannan & Seddon was Cyril McGinley who joined the firm in the late 1920’s and retired as a Consultant in 1997 aged 87.

Currently we have two Partners within our firm. Tony Sullivan who has been with us for 29 years and Colin Smith, 26 years. The firm also has two long serving Legal Executives Elaine Knowles and Beverley Walsh.  

Region: West Coast

Phone: 03 768 4169

All the information published on this website, or in any article herein is true and accurate to the best of the authors' knowledge. Information on this site should not be a substitute for legal advice. No liability is assumed by NZ LAW Limited, or individual NZ LAW member firms for losses suffered by any person or organisation relying directly or indirectly on information published on this site. Views expressed in any article are the views of the authors individually and do not necessarily reflect the view of NZ LAW or their member firms. Information appearing on this site may only be reproduced with prior approval from NZ LAW Limited Head Office, and credit being given to the source. © NZ LAW Limited