This case concerned a mortgage fund which suspended redemptions after the GFC and notified members of impairment losses due to a drop in the value of the mortgaged land. A member who had monies invested in the scheme requested the fund to make available a wide scope of documents relating to the financial condition of the fund to assess whether there had been any actionable breach of trust.
The court found that a beneficiary has no equitable proprietary interest in trust documents so as to give rise to a right of production and inspection but an order may be made as part of the court’s inherent jurisdiction to intervene in the administration of trusts. The court intervenes if it is shown that the fund manager has fallen short of its duty to make disclosure under the Act or the Constitution.
The court did not find that the fund manager had fallen short of its duty to disclose given it published annual reports and other reports about the performance of the fund and had a compliance plan in place, which was regularly audited. The court also found the fund manager justified in declining the request for inspection given the width of the documents sought and noted that the proposal of the fund manager to answer specific questions under the supervision of the court was not taken up by the member.