RECONCILING DISCRETION AND ACCOUNTABILITY: The legal bases under which an object of a discretionary trust is entitled to access trust information in Australia
The Australian law of trusts lacks a clearly defined basis under which objects of a discretionary trust are able to access trust information. Correspondingly, the Courts have incongruously articulated, and relied upon, two bases to justify an object’s entitlement: a right based on the object’s proprietary right and a right based on the trustee’s obligations of accountability. This essay proposes that reform is needed as the present approach fosters uncertainty and disharmony in terms of trustees’ obligations and beneficiaries’ rights under a discretionary trust. This paper thus explores the different bases proposed and the principles underlying these alternatives. It first identifies what constitutes “trust information” and the limitations placed on access to such information. Secondly, it explores the judicial and academic reasoning in support of each basis. Finally, this essay proposes that courts should follow the ‘obligations approach’ until it the matter is reconciled in a higher court.