While the Gina Rinehart family saga seems to have largely disappeared from the headlines over the last few years, a recent judgement has shown that the dispute is lingering on and also provides some interesting guidance in relation to requirements to disclose trust documents.
As some readers would be aware, there is significant literature in relation to the obligations of a trustee to provide copies of ‘trust documents’ to (potentially disgruntled) beneficiaries.
The generally accepted position (dating back to 1965) is that a beneficiary has a right to access trust documents including copies of the trust deed, any variations to the deed and the accounts of the trust to the extent they relate to that beneficiary, however the trustee is entitled to withhold documentation relating to its decision-making process, including advice it may have received from accountants or lawyers.
The latest Rinehart case however looked at the question of which documents the newly appointed trustee of a trust was entitled to access from the retired trustee.
By way of background, in 2015 as part of a family settlement, Gina Rinehart agreed to retire as trustee of the Hope Margaret Hancock Trust and her daughter Bianca was appointed as the new trustee. In the context of the ongoing Court proceedings, Gina was ordered to hand over all ‘documents of the trust’ to the new trustee.
Gina’s lawyers contended that she had complied with her obligations, however it subsequently became apparent that a number of documents had been withheld, including copies of advice provided to Gina (in her capacity as trustee for the trust) by various advisers, including her law firm.
Gina argued the additional documents were not required to be handed over as they were not ‘documents of the trust’ and in a number of instances, were either confidential or subject to legal professional privilege.
In granting the orders sought by Bianca (as the new trustee), the Court ordered Gina to hand over a number of additional documents confirmed her obligations extended to providing the new trustee with all documents used in relation to the administration of the trust.
This included documents which disclosed the trustee’s deliberations, documents which contained confidential information about the trust and other entities in the Rinehart Group and legal and accounting advice received by the trustee.
Only limited exceptions were made in relation to documents containing advice Gina had obtained specifically in relation to the dispute between her and her children.
In short, the judgement confirms that while the beneficiaries of a trust have a relatively narrow right to ‘trust documents’, a retiring trustee’s obligation to provide documents and information to an incoming trustee is far more broad.
The position can be summarized by one paragraph from the judgement, which reads, in part:
‘…authority supports…the proposition that although there are analogies between the rights of a beneficiary to inspect trust documents, and the obligation of a trustee to deliver up trust documents to a successor, they are not identical, and the obligations that an outgoing trustee may owe to an incoming trustee are more extensive than those owed to a beneficiary seeking inspection.’
For those who are interested, the case is Hancock v Rinehart (Trust documents) [2018] NSWSC 1684.
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