Last week we had to assist a trustee of a family trust in their attempt to resist a review of a decision by a disgruntled beneficiary.
Many will be aware of the High Court decision in Finch v Telstra Super Pty Ltd [2010] HCA 36 – a link to the case is as follows:
http://www.austlii.edu.au/au/cases/cth/HCA/2010/36.html
In very broad terms, we confirmed to the trustee the relatively settled position that seems to have evolved in this area, namely that the exercise of a discretion by a trustee is not subject to review by the court unless one of the following three factors is present:
1. The trustee does not act in good faith;
2. The trustee does not give real and genuine consideration to the exercise of the discretion and the purposes for which the discretion was granted; or
3. Reasons for the decision are provided by the trustee, but those reasons are unsound.
Until next week.
