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Rundle, Olivia --- "Lawyers' Preparation for Court-Connected Mediation: the Supreme Court of Tasmania" [2013] UTasLawRw 2; (2013) 32(1) University of Tasmania Law Review 20

Lawyers’ Preparation for Court-Connected Mediation: the Supreme Court of Tasmania

OLIVIA RUNDLE*

Abstract

This article[1] reports findings from a study of lawyers’ preparation for court-connected mediation at the Supreme Court of Tasmania. Interviews with legal practitioners were undertaken during 2006 and 2007. The findings are contextualised within the court’s programme and compared with empirical research findings from other studies. The data demonstrated a clear need for better guidelines and education of lawyers about their role in preparing themselves and their clients for mediation. Most lawyers prepared reasonably thoroughly for the mediation process, however gaps were identified in terms of consideration of the non-legal issues affecting the client and other party. Many lawyers effectively narrowed the potential of court-connected mediation by taking a litigation approach to their preparation for the process.

I INTRODUCTION

The way that lawyers prepare themselves and their clients for mediation sheds light upon the extent to which disputants are offered an opportunity to explore a range of their interests, to participate directly and to cooperate with the other party. Clients’ expectations are affected by how their lawyers explain the mediation process and the tasks that lawyers engage in during the preparation phase.

A number of factors influence the way that lawyers prepare for court-connected mediation. In the UK context, Penny Brooker and Anthony Lavers have noted that:

The introduction of [alternative dispute resolution (‘ADR’)] into the civil justice reform programme in the UK has led, inevitably perhaps, to an expanded role for the lawyers in the practice of mediation and the Civil Procedure Rules (‘CPR’), albeit perhaps unintentionally, support the legal professions in influencing the way the process develops.[2]

The traditions of legal practice play a powerful role: the way that lawyers have been trained, the culture of legal representation and client-lawyer interaction.[3] When mediation is connected to the court process, the shadow of litigation casts a long shadow.[4] Clients rarely participate directly in traditional litigation processes such as trial or lawyer negotiation. If lawyers do not anticipate active participation by their clients in mediation, this affects the way that the client is engaged in the preparatory phases. A narrow, litigation centred vision of mediation directs the way that participants prepare for the process towards the way that they would prepare for a trial event. Lawyers often express a view that court-connected mediation is a tool within the litigation system that resolves cases with reference to the primarily adversarial trial process. This can be contrasted with a view that court-connected mediation is an alternative to trial or lawyer negotiation, which is largely autonomous from other litigation processes and therefore not bound by restricted legal views.[5]

This article illuminates the practices of lawyers within the Supreme Court of Tasmania (‘the Court’), as reported by a sample of lawyers who were interviewed in 2006 and 2007, focusing specifically on data about their preparation for mediation. The data were collected between six and seven years ago and its aged nature must be acknowledged. Without going into detail, it is almost certain that changes have occurred since that time within the Supreme Court of Tasmania’s caseload and mediation programme, within the Tasmanian legal profession and within the dispute resolution field. Therefore, the empirical data presented in this article should be read as a snapshot of views expressed in 2006-2007. There is an opportunity to gather data in the future and compare it to the data gathered for this study.

This article starts by outlining the context and methodology of the research. Secondly, findings about lawyers’ general attitudes towards court-connected mediation are summarised. Thirdly, the way that lawyers reported preparing themselves and their clients for mediation in the Court is reported. Discussion then turns to the significance of the research findings and changes that have occurred since the data were collected. Finally, future directions are contemplated.

II COURT-CONNECTED MEDIATION IN THE SUPREME COURT OF TASMANIA

The results of the author’s research in Tasmania, Australia, contribute to the body of knowledge about lawyers’ perspectives of mediation.[6] The research investigated the practice of court-connected mediation in the Supreme Court of Tasmania. Lawyers were interviewed about a range of things, including their typical preparation of themselves and their clients for mediation at the Court.

A Context

The Supreme Court of Tasmania is the superior court of the state of Tasmania and deals with a range of general civil actions, including actions for debt recovery, contractual disputes, torts, declaratory relief, admiralty and probate. The Court now deals exclusively with claims over $50 000, although, until 2007 the exclusive jurisdiction was for claims over $20 000. The civil lodgements at the Court totalled 1336 in 2005-2006.[7]

Court-connected mediation was initiated in motor vehicle personal injuries claims at the Court in 1992. Following this trial the practice was expanded to other kinds of claims. In 2000/2001, the Court obtained a power to refer matters to mediation compulsorily.[8] As an example of the proportion of litigated matters that were mediated, each financial year from 1999/2000 to 2005/2006, between 21 per cent and 36 per cent of Hobart torts matters[9] were finalised[10] after court-connected mediation had occurred at some stage during the litigation process. In the Hobart Registry, 21 per cent of all finalisations and 33 per cent of all torts matters finalised between 2003 and 2006 had been mediated at some stage. Therefore, although the majority of finalisations occurred without referral to mediation, a significant proportion of civil actions were referred to mediation at some stage.

The broader research study confirmed that matters that were declared ready for trial in the Court were no longer subject to long delay, referral to mediation was a common pathway and the judiciary actively supported court-connected mediation.[11]

B Research Method

The study involved, among other things, interviews of Tasmanian lawyers. The data are self-reported and therefore cannot be relied upon as proof of what lawyers actually did in their practice. Lawyers were asked to reflect upon their ‘typical’ way of approaching mediation at the Court. They were not asked to reflect upon what they actually did in a particular case.

The legal profession in Tasmania is a fused profession and most practitioners practise as both barrister and solicitor, although there is a growing independent bar. In April 2007, there were 471 barristers and solicitors and 35 specialist barristers registered in Tasmania.[12]

Forty-two lawyers who maintained a civil litigation practice in the Supreme Court of Tasmania were interviewed between April 2006 and May 2007. These interview participants represented approximately 29 per cent (of roughly 146) of the practitioners who worked in the Supreme Court of Tasmania’s civil jurisdiction.[13] A total of 142 lawyers were invited by email to participate in the research, with follow up invitations to practitioners in targeted groups sent later, to try to ensure that the sample of participants was representative of the population of 146. The groups targeted in the follow up contact were senior practitioners and members of the independent bar. The interview sample was roughly representative of the target population in terms of gender, age and experience practising law.

The focus of the research was upon the qualitative information gathered from the lawyer interviews – general themes, specific views and opinions about matters that are central to mediation.[14] The study appeared to be the first qualitative study of its kind in regard to lawyers’ mediation practice in connection with Australian courts. Descriptive statistics are reported here; namely, the number and percentage of responses to interview questions. These are intended to contextualise the qualitative information and to provide some sense about the frequency of particular views held by the lawyers. Clearly, only tentative conclusions can be drawn about the degree to which these views are representative across Tasmania. Where appropriate, findings from other studies are compared to the results of this research.

III GENERAL ATTITUDES TOWARDS COURT-CONNECTED MEDIATION

Some insights into the attitude and perspectives of the impact of court-connected mediation on general legal practice provides a background to the interview responses about preparation to participate in mediation at the Court.

There was general agreement among the interviewees that the court-connected mediation process was a beneficial part of the litigation process and that an emphasis on the exploration of settlement was beneficial to the legal system, the legal profession and disputants. There was an overwhelmingly positive attitude towards the Court’s mediation programme and the identification of benefits to a wide range of stakeholders resulting from it.[15]

The finding that Tasmanian lawyers view court-connected dispute resolution favourably is consistent with other Australian research findings.[16] Participants in court-connected dispute resolution programmes overseas (both lawyers and litigants) are also generally supportive of them and view the programmes as worthwhile in general as well as valuable to their individual cases.[17] The responses to some questions about general legal practice are set out in the Table below, and discussion follows.



Always
Usually
Sometimes
Never
TOTAL
How frequently do you attempt to resolve your clients’ disputes by negotiation (other than during a mediation process)?
23 (62%)
9 (24%)
5 (14%)
Nil (0%)
37
How frequently do you advise your clients to participate in mediation?
26 (72%)
8 (22%)
1 (0.4%)
1 (0.4%)
36

Thirty-seven[18] legal practitioners were asked, ‘[h]ow frequently do you attempt to resolve your clients’ disputes by negotiation (other than during a mediation process)?’ Most of the lawyers did not restrict their negotiation opportunities to those provided within the court-connected mediation setting. All of the respondents engaged in unassisted lawyer negotiation at least sometimes.[19] This finding was consistent with the statistics from the Court which showed that most litigation was still resolved without referral being made to mediation.[20]

Thirty-six[21] legal practitioners were asked, ‘[h]ow frequently do you advise your clients to participate in mediation?’ This question sought an indication as to whether or not clients were being encouraged to participate in mediation by their legal practitioners. Twenty-six of the 36 respondents to this question (72 per cent) indicated that they ‘always’ advised their clients to participate in mediation, reflecting the widespread enthusiasm amongst the profession for the mediation process. Another eight (22 per cent) reported that they ‘usually’ advised their clients to participate, indicating that there would be some occasions when practitioners would be of the opinion that mediation was inappropriate. One practitioner ‘sometimes’ advised clients to participate and one ‘never’ did so. Neither of these practitioners opposed court-connected mediation. Their response instead reflected their view that mediation was a standard pre-trial process and therefore they perceived that referral was inevitable, which meant that they do not need to advise about whether or not to participate. Notwithstanding the sample size of 36 responses to this question, the overwhelming indication was that lawyers did advise their clients about the mediation process as a dispute resolution option.

Most of the thirty-six legal practitioners who reported that they practised prior to the formalisation of court-connected mediation (N=32, 89 per cent) identified some change to the way that they practised. One such change was the provision of a structured opportunity to discuss the possibility of settlement.[22] This suggests that many lawyers considered the opportunity to negotiate within the mediation context to be preferable to negotiation outside of that setting. One of the benefits is that the setting of a mediation date provides an incentive to prepare for serious negotiations on that date.

Whether the lawyers thought that mediation had changed their litigation practice or not, court-connected mediation was seen to be an opportunity to engage in settlement discussions. Presumably, to make the most of this opportunity, lawyers would prepare thoroughly for the negotiation event.

IV PREPARATION FOR MEDIATION

Lawyers should, prior to mediation, prepare both themselves and their clients to participate.[23]

For parties’ participation in mediation to be informed and for the mediation process and outcome to be fair, parties need to understand what is likely to happen during the mediation process, what the role of the mediator is, and that they can terminate mediation at any time. Parties who are more prepared for mediation are generally thought to have a better experience and a more productive session, and represented parties are presumed to be better prepared for mediation than unrepresented parties.[24]

Wissler has noted, however, that having a lawyer is no guarantee that parties will receive adequate information or preparation for mediation.[25] Not all lawyers prepare themselves adequately, let alone their clients. North American research has found that parties who are prepared for mediation are more likely to settle, to think that the mediation process and outcome was fair, that they had a chance to tell their views and contribute to the outcome, and that the mediator was impartial and respectful.[26] The degree and nature of preparation required varies depending upon the nature, context and purpose of the mediation. It will also depend upon the participants and their interpersonal relationships.

In the present study, the expectation that the nature and extent of lawyers’ preparation for mediation would vary was based partly upon other research. Lawyers working in the Minnesota Supreme Court reported that they preferred to be thoroughly prepared for mediation (including full discovery).[27] Macfarlane’s investigation into lawyers working in Toronto and Ottawa found varied practices, although most lawyers prepared by conducting a case analysis.[28] Macfarlane identified five ‘ideal types’ from her lawyer data, including the ‘pragmatist’, ‘true believer’, ‘instrumentalist’, ‘dismisser’ and ‘oppositionist’. These models reflected particular attitudes towards the court-connected mediation process. Lawyers tended to display characteristics of several ideal types rather than adhering to one model. Lawyers who displayed characteristics of ‘dismissers’ or ‘pragmatists’ sometimes undertook no preparation because they believed that settlement was not a realistic possibility.[29] Gerschman found that 8 out of the 10 lawyers he interviewed reported that they would not plan negotiation strategies before mediation.[30] A common theme in other studies is complaint about inadequate preparation for the mediation process by some other lawyers. For example, mediators operating in the Central London Court reported lack of preparedness and ‘going through the motions’ as a particularly unhelpful approach to mediation.[31] Similarly, mediators in the Judicial Circuit of Illinois reported that one of the biggest stumbling blocks was when an attorney was ill-prepared or lacked the knowledge to fully assess the value of the case.[32] Lack of information was also cited as problematic by lawyers interviewed in Saskatchewan, who expressed concern about available information not being exchanged prior to mediation.[33] Thirty-nine per cent of Maine lawyers reported that their colleagues were well prepared for mediation only ‘sometimes’ or ‘rarely’.[34] There is therefore variation in the approaches that lawyers take to preparation for mediation and these differences are a source of tension within the legal profession. Many lawyers appreciate the value of what Timothy Hedeen calls ‘setting the table before sitting down’.[35]

There are, however, some fundamental considerations that would be expected in preparation for negotiation and mediation.

Attorneys and mediators are trained to consider the issue-specific matters, positions and interests, aspirations and alternatives, framing and sequencing, concessions and tradeoffs, and authority and contingent terms prior to negotiation.[36]

It would be reasonable to expect that in anticipation of any negotiation event, a lawyer would review the file, consider options for settlement, consider negotiation strategies and reflect upon the personality of the opposing legal practitioner. Furthermore, in order to understand the client’s goals and develop a strategy to achieve those goals (or modify a client’s expectations where they could not be achieved), a lawyer would consider the client’s needs and make educated guesses about the other party’s interests. In mediation, it would also be wise for the lawyer to find out who the mediator was and to develop an effective plan. It was expected that a thoroughly prepared lawyer would consider all of these matters in preparing themself for mediation.[37]

The Tasmanian interviewees were asked an open question; ‘[h]ow do you prepare yourself and your clients for mediation?’ as well as two checklist questions, one relating to their own preparation for mediation and another relating to their preparation of their clients for mediation.

A limitation of the data is that the interviewer only asked about general tendencies rather than the specifics of the preparatory activities in relation to a particular case. Preparation for mediation was only a small part of the interviews and the questions relied primarily upon checklist responses. Therefore, it is not possible to explore detailed content of the explanations that lawyers gave to their clients.

A Preparation of Themselves

1 Checklist Responses

Thirty-nine practitioners[38] were asked to indicate which of the following actions they typically undertook in preparation for mediation:

TOTAL RESPONSES
100% (N=39)




















Review the file
95% (N=37)
X
X
Consider options for settlement
90% (N=35)
X
Consider strategies
92% (N=36)
X
X
Reflect on the personality of the opposing legal practitioner
92% (N=36)
X
X
Find out who the mediator is
54% (N=21)
X
X
X
X
Consider the needs of the parties
56% (N=22)
X
X
X
Number of respondents who selected these combinations of items[39]


8
7
7
6
1
1
1
1
1
1

These results, albeit based upon a sample size of only 39, nonetheless demonstrate that the preparation activities of legal practitioners varied considerably.

High percentages of practitioners reported that they undertook each of the items on the list in preparing themselves for mediation. The moderate sample size of 39 moderates the significance of these percentage figures, which are used here for descriptive purposes only. Nonetheless, the high proportion of positive responses to most of the items on the checklist demonstrates a clear trend in preparation for mediation and the disparity of responses to the other two items demonstrates a diversity of approaches.

2 Comparable to Trial Preparation

Overall, a thorough understanding of the legal case, consideration of options and development of strategies for mediation were considered to be important preparation tasks. Most practitioners reviewed the entire case, updated their evaluation of the case, analysed the strengths and weaknesses of the legal arguments and considered the likely outcome if the matter proceeded to trial.[40] Some practitioners reported that they usually prepared for mediation in the same way that they prepared for trial, although some did not prepare witness proofs and none prepared their cross-examination prior to mediation. Some examples of the comments made about preparation of themselves for mediation were:

I’ll go through the pleadings and make sure where possible that we’re in a position to prove what we allege or defend what is alleged against us. Go through documents as to quantum, whether they be medical reports, whether they be contractual documents and the like. And then I will always either handwrite or dictate some submissions if you like, that I’ll use as my opening in the mediation. ‘This is our case, this is why we are going to win, this is why you should make a decent offer to settle the matter.[41]

By having very detailed particulars, I think just knowing precisely the values of all the heads of damage that you’re seeking in terms of quantum and also being really prepared on the question of liability and to know the holes in the other person’s case. So I think you have to have marshalled all the same information that you would have to have if you went to court, albeit that you don’t necessarily have to have witnesses briefed, but you have to know what they’re likely to say, in order to know what the strengths and weaknesses in your case are.[42]

Some lawyers prepared submissions for mediation as if they were preparing for trial. The purpose of submissions in the courtroom is to persuade the judge or jury that the legal arguments presented on the clients’ behalf should be accepted. It appears that many lawyers tried to persuade the other participants to accept their legal arguments in mediation in much the same way as they approach the persuasion of a judge.[43] By making submissions, some lawyers attempted to convince the other party that ‘I’m right, you’re wrong.’ This can be contrasted with the cooperative problem-solving approach to negotiation, where participants share information and the emphasis is on them listening to one another more than stating their own positions and challenging the other about the accuracy of their view.[44] There is an acknowledgment in cooperative problem solving that perceptions may vary and rather than one perception being ‘right’ and the other ‘wrong,’ an objective ‘truth’ is not assumed. By contrast, the formal legal system assumes that there is an objective truth. The role of a judge is to prefer one argument over another and to declare which perception is ‘right.’ Some lawyers may not have shifted their legal perspective of conflict in the context of mediation. This may explain the tendency to make addresses in mediation as would be done in court. The consequences include an exclusive focus on legal arguments and adversarial rather than cooperative approaches. Because in mediation the parties are the decision-makers, persuasion requires something different from trial advocacy to an independent third party judge.

3 Options and Strategies

Lawyers were also asked whether or not they considered options for settlement and their strategies for the mediation. An overwhelming majority (N=35 of 39, 90 per cent and N=36 of 39, 92 per cent) of interviewees did consider these matters. A conscious development of strategy is consistent with literature that suggests that superior negotiators consider multiple options, examine and identify common ground, consider the long term consequence of different issues, set ranges as goals rather than being specific and are flexible in relation to procedure.[45] However, the interview responses were not detailed enough to cast light upon how many options or what kinds of strategies were developed.

4 Identity of Other Participants

The personality of the opposing legal practitioner was also considered to be a relevant preparation task by the overwhelming majority (N=36 of 39, 92 per cent) of interviewees, which meant that the negotiation style of that practitioner was likely to be considered. Consideration of the personality and approach of other legal practitioners is an important factor in negotiation planning.[46] One practitioner noted that it was sometimes necessary to qualify advice to a client about the potential benefits of mediation because of the personality of the opposing legal practitioner:

And of course when you know that type of practitioner is on the other side you have to say to your client, who is looking forward to this practical option to stop going to court - well there’s a bit of a caveat on that Mrs Smith because we’ve got a so and so on the other side who is not going to approach it in the right manner.[47]

This comment demonstrated that some personalities may demonstrate a non-cooperative attitude towards the mediation process and this was perceived by some other lawyers to inhibit the client’s aim.

Twenty-one of the 39 respondents (54 per cent) did not find out who the mediator was prior to mediation, which suggested that they may not consider that the individual mediator’s style is something worthy of considering prior to the mediation. Possible explanations for this include: that the mediators may have had similar styles and therefore there was an element of homogeneity (although variation was reported by mediators),[48] and some practitioners had only experienced one of the Court’s mediators or that the lawyers did not consider that the mediator’s role is significant. It is unclear which of these possible explanations applies, if either. By contrast, just under one half (N=18 of 39, 46 per cent) of the interviewees did typically find out who the mediator was. The mix of responses and lack of clarifying remarks makes it difficult to draw conclusions from these results.

5 Non-Legal Interests of the Parties

There was a similar division among the practitioners in relation to consideration of the needs of the parties. Many lawyers asked during interviews ‘what do you mean by needs of the parties?’ This response reflected the awkwardness of the particular question from the perspective of legal practitioners, who were not accustomed to this terminology.[49] My response to this question was to explain that I meant the client’s individual needs, which are often broader than their strict legal entitlements.

On the one hand, 17 of the 39 lawyers who responded to the question (44 percent) reported that they did not consider the needs of the parties in preparing themselves for mediation. There were some comments made about the irrelevance of the non-legal needs of the parties to court-connected mediation. For example:

In the litigious process you want to win. Your clients’ needs, well I don’t know what you mean, is it food on the table or what?[50]

With large clients it’s not a personal matter; it’s just a matter of where settlement will end up.[51]

This group of views demonstrates how some lawyers’ perspectives reinforce the exclusive focus on legal issues in court-connected mediation, at the expense of the core mediation feature of responsiveness, which invites inquiry about the individual needs and preferences of the disputants.

On the other hand, the remaining 22 (of 39=56 per cent) of the practitioners reported that they did consider a range of needs of the parties in their preparation for mediation, which means that for those practitioners their client’s needs or the needs of the other client were a relevant consideration. Some of these lawyers thought outside the legalistic world view of rights and responsibilities and took a more comprehensive approach to their service to their client and dispute resolution. For example:

...[Y]ou need to be considering the needs of your client. I suppose you don’t really need to consider the needs of the other side, although if you can latch onto what they are then that gives you an advantage in the negotiation process.[52]

The final part of this comment demonstrated that although the lawyer was interested in providing a good service to their client, he or she would also take the needs of the other disputant into account for the purpose of planning the negotiation to pursue the client’s interests. The following lawyer considered the needs of the plaintiff on the other side because it was important to treat them with respect and dignity.

...[O]ne of the things I can, in personal injuries litigation, particularly when acting for a defendant, is to keep in mind that on the other side there is a human being under a great deal of stress. ... For me it is another file, for them it is their life. So I think it is important to keep that in perspective and to I think to treat them with that respect. I think it is also important from the point of view too if you are trying to achieve a settlement, on many occasions, to bring a human and sometimes compassionate face to what they might see as the bastard insurer defendants’ lawyers, who are just trying to save money - (which we are)...[53]

These responses demonstrated that many lawyers were attune to the non-legal elements of disputes, including personal injuries and insurance claims, and actively considered the non-legal elements in negotiation planning.

The split between the lawyers as to whether or not they considered the needs of the parties in their own preparation for mediation demonstrated two contrasting perspectives of the relevant considerations in mediation. Those lawyers who did not consider needs of the parties demonstrated a preference for a narrow problem-definition, whereas many of those who did consider those needs adopted a broader view of the problem.[54]

6 Lawyers’ Preparation of Themselves

On the whole, there were very mixed statements made by lawyers in relation to their consideration of the needs of the disputants in their own preparation for mediation. A client-centred lawyer would always maintain mindfulness about their clients’ needs in a holistic rather than limited legal sense.[55] In order to provide advice in relation to the appropriate dispute resolution process for a client, what the client wants is a paramount consideration. The capacity for court-connected mediation to achieve what the client wants should be considered. The interview responses demonstrated that close to one half of lawyers did not consider these issues in their preparation for mediation. This contrasts with the remainder of lawyers, who did consider a broader range of party needs in order to develop their mediation strategy. The consequence is a missed opportunity for mediation to be used to pursue interests that are not strictly legal in nature. Instead, the likelihood is that a narrow legal understanding of the client’s conflict was what the lawyer pursued in the mediation process.

Lawyer preparation for court-connected mediation varied considerably between practitioners. The overwhelming majority of lawyers performed tasks that enabled them to build a persuasive argument in relation to their client’s legal case. They prepared for mediation very much the same way as they prepared for trial, but did not perform all of the preparation tasks that they would for trial. The evidence showed that in court-connected mediation the legal issues were the main consideration, although non-legal interests were not discounted entirely in lawyers’ own preparation for mediation.

B Preparation of Their Clients

As noted above, the way that lawyers prepare their clients for mediation can influence the mediation process enormously, by shaping the nature of client participation and by determining the way that the process will be approached.

As with lawyers’ own preparation, research has indicated a variety of approaches by lawyers to the preparation of clients for mediation. Divorce lawyers in Maine reported that they typically described the mediation process, seriously examined settlement options and approaches as well as preaching mediation’s virtues to clients in preparation for mediation.[56] At the other extreme, Sourdin found that in some cases, Victorian Supreme and County Court clients were prepared for mediation by being advised not to speak as by speaking they could adversely affect their prospects of success in future litigation.[57] If a range of lawyer attitudes towards mediation is expected, as described by Macfarlane in her ‘ideal types’, then the preparation of clients for mediation is bound to vary from practitioner to practitioner.[58]

Several studies have found that party assessments of the fairness of mediation are more likely to be positive if their lawyers prepared them for mediation.[59] Macfarlane and Keet found that the clients they spoke with not only felt inadequately prepared for mediation, but also had ideas about what adequate preparation would involve.[60] They wanted preparation that included: basic information about the mediation process, information about confidentiality and ‘without prejudice’, what paperwork to bring to mediation, some information about negotiation strategy, guidance for the appropriate division of roles between lawyer and client, and discussion about the different purposes of mediation.[61] Almost half of the clients interviewed by Macfarlane and Keet told them that they felt ill-prepared. Most went into their mediation not knowing about, or feeling confused about what to expect. They reported that the only preparation they recalled was a brief letter telling them where and when to arrive or a short conversation, often conducted in the car on the way to mediation.[62] This research clearly demonstrates that clients want to feel well prepared for court-connected mediation.

1 Checklist Responses

Thirty-nine legal practitioners[63] were asked to indicate which of the following matters they typically considered to prepare their clients for mediation.

TOTAL RESPONSES
100% (N=39)












Likely trial outcome
79% (N=31)
X
X
Future costs
85% (N=33)
X
X
Options for settlement
97% (N=38)
Mediation process
92% (N=36)
X
Their clients’ needs regarding outcome
69% (N=27)
X
X
Number of respondents who selected these combinations of items[64]


17
8
5
2
2
2

It was expected that a thoroughly prepared lawyer would discuss each of these matters with their client prior to a court-connected mediation.[65] Again, the responses from Tasmanian lawyers were very mixed. There appears to be a reasonably eclectic mix of practices in relation to the preparation of clients for mediation.

The moderate sample size of 39 moderates the significance of these percentage figures, which are used here for descriptive purposes only. Nonetheless, the high proportion of responses to most of the items on the checklist demonstrates a clear trend in the preparation of clients for mediation.

2 Comprehensive Legal Advice

In keeping with their professional responsibilities, most lawyers considered that it was important to give their clients comprehensive advice in relation to the legal claim prior to mediation. For example:

I think that it is important before you go to a mediation, that there should have been a reasonably high level appropriate to the case of written advice and analysis of the case provided to the client. I think that advice should not be a defensive advice either, it should be an advice where the lawyer actually sets out the pros and cons of the case so it does it objectively, sets out the arguments which he perceives that are going to be run against them. And gives what he sees as being the range of reasonable settlement. I just don’t think that it’s fair for plaintiffs to be in a mediation where they haven’t been given that range beforehand. It’s just not fair on them to be making decisions under pressure when they haven’t been given that before.[66]

The provision of legal advice in respect of the strengths and weaknesses of the legal claim and the potential trial outcomes is an essential part of the lawyer’s role.[67] Disputants ought to have comprehensive legal advice before they are expected to decide whether or not a settlement offer is acceptable. Their legal position is an important consideration, particularly where they are involved in litigation. Most lawyers (N=31 of 39, 79 per cent) did discuss the likely legal outcome with their clients prior to mediation.

The most surprising results, however, were the number of lawyers who did not discuss the likely legal outcome or future costs in preparation of their clients for mediation. Although most practitioners responded positively to these questions, 8 of 39 (21 per cent) did not discuss the likely trial outcome with their clients and six (15 per cent) did not discuss future costs. It is possible that some practitioners answered ‘no’ to this question because they discussed these matters in any event rather than specifically in preparation for mediation. However, there may be some practitioners who failed to assess the relative strengths and weaknesses of the legal claims or to provide details about legal costs prior to mediation.

Some practitioners placed great faith in the mediation process to assess the strengths and weaknesses of the legal case for them and placed the responsibility for reality testing onto the court-appointed mediators. For example:

I don’t try to go into it too detailed to the client, because their eyes seem to open. It’s no use, I um, if you explain what the other side may be putting through then they tend to lose confidence and they think that we’re arguing for the other side. So you let the court do that process. I explain that there will be a mediator there who’s got court training, I explain to them to listen to what the mediator has got to say and ‘Because I’m on your side I have to be objective but the mediator is totally objective.’ ... The mediator is the first contact that the client has had with someone neutral about their dispute. The first taste of what the court’s going to be like ... and they start being a bit more realistic about things.[68]

Comments such as this demonstrate that some lawyers did not provide thorough legal advice to their clients prior to mediation. Their clients were potentially at a disadvantage in mediation and would not be able to assess the appropriateness of a settlement offer adequately on the basis of their lawyer’s advice alone. Lawyers should help their clients to prepare for mediation by (amongst other things) undertaking a risk analysis and developing strategies to achieve outcomes that accord with the clients’ interests.[69] The practitioners who did not provide an analysis of the strengths and weaknesses of the legal case and the range of possible legal outcomes were not undertaking a risk analysis for their clients, which would make it impossible to develop appropriate strategies for mediation.

Similarly, those legal practitioners who failed to advise their clients in relation to future costs were denying their clients the opportunity to assess the acceptability of settlement proposals. Lawyers should provide to their clients details about costs to date, the likely costs of mediation and the likely costs if a matter does not settle prior to trial.[70]

3 Options

Almost all of the 39 interviewees (N=38, 97 per cent) confirmed that they discussed options for settlement with their clients prior to mediation. The nature of such options would vary depending upon the subject matter of the dispute and the style of negotiation which was intended. Mediation at the Court was sometimes conducted in the settlement style of mediation.[71] If the incremental bargaining style of negotiation is intended, then lawyers should help their clients to anticipate the settlement range.[72] If it is intended to engage in interest-based negotiation, then an exploration of the clients’ individual needs and interests, generation of possible options and evaluation of those options are valuable preparation activities.[73] Some guidelines recommend that lawyers assist their clients to consider a wider range of options than those available in a court.[74] The interviewees did not elaborate on the subject matter of the options that they discussed with their clients prior to mediation.

4 Process Information

Nearly all interviewees (N=36 of 39, 92 per cent) indicated that they discussed the mediation process with their clients in preparation for mediation. Explaining the mediation process is a fundamental part of the lawyer’s role.[75] When asked to describe the process of mediation as practised at the Court, descriptions were of the following ‘typical’ mediation, practised in motor vehicle and workplace personal injuries matters, professional negligence matters where the professionals were not present at the mediation and commercial debt collection matters:[76]

• The mediator welcomed participants and offered them a cup of tea or coffee.

• The mediator made an introductory statement about the mediation process, the role of the mediator and the confidential nature of the mediation.

• The plaintiff’s case was presented, invariably managed by the lawyer and usually by the lawyer speaking on the plaintiff’s behalf.

• The defendant’s case was presented, invariably managed by the lawyer and usually by the lawyer speaking on the defendant’s behalf.

• The mediator summarised the issues to try to define them. This was usually a quick summary.

• The mediator held a private session with each disputant and their legal advisor. The focus of the private session was usually on the strengths and weaknesses of the two sides of the legal argument and the amount that the disputant was prepared to propose for settlement. Some mediators provided an opportunity for the disputants to speak in the private session and to ventilate personal and non-legal issues, particularly those which may have been blocking their ability to reach agreement.

• The parties commenced making offers and counter-offers. Sometimes this occurred with all participants present in the same room. Usually the offers were supported by an explanation about why it was an appropriate settlement amount. At other times the mediator relayed the settlement offers on behalf of the parties.

• If an agreed figure was reached then the terms of settlement were typically formalised in a consent judgment, which was signed by the legal practitioners and the Registrar. At other times, particularly where privacy was important to one or both disputants, settlement was by way of a Deed of Release.

The nature of the process anticipated by lawyers was a legally-focused settlement oriented discussion. Despite the fact that a broader view of the problem was possible within the mediation programme, this description of process is likely to have built expectations within clients of a law and settlement oriented negotiation event. This expectation perpetuates the narrow nature of court-connected mediation programmes.[77]

5 Non-Legal Interests

In contrast to the lower number of lawyers who reported considering the needs of the parties in their own preparation (N=22 of 39, 56 per cent), a greater number of interviewees (N=27 of 39, 69 per cent) indicated that they did discuss the needs of the parties with their clients prior to mediation. Again, the awkwardness of the term ‘needs’ is acknowledged. Some lawyers considered their client’s needs and then appraised their clients of the limited remedies that were available from the legal system, which may or may not be equipped to meet those needs. For example:

I ask the client what their expectations are. I’ll probably ask them several times through the course of the litigation what their expectations are, because you want to know whether their expectations can be met by the process, because many people have very very unrealistic expectations about the process. Interestingly enough, at both levels, too high and too low...[78]

This attitude may explain why some lawyers discussed the needs of the parties with their clients but did not consider the needs of the parties in their own preparation for mediation. The discussion in relation to needs may be more about managing (and reducing) the clients’ expectations rather than expanding the relevant considerations at mediation. This approach may be consistent with client-centred practice because clients’ expectations are being modified rather than ignored. Presumably, if dispute resolution options have been considered properly, the matter has reached court-connected mediation because that is the most appropriate means of pursuing the client’s needs and interests.

The remaining 12 of the 39 respondents (31 per cent) did not typically discuss the needs of the parties with their clients. Two practitioners stated explicitly that in their opinions the needs of the disputants were not an appropriate focus in court-connected mediation:

I don’t think it’s appropriate to enter a mediation thinking about what the plaintiff or defendant needs. Because I think that’s putting the wrong emphasis on what you’re trying to achieve in the court process, in the mediation process. You can understand that your client will not settle for a certain figure because it will bankrupt his company or something of that nature, but I think it’s more appropriate to look at what your client can achieve at trial, and give them that advice and look at the range. Because there’s absolutely no point in saying to your client "I understand that you need this to settle for $200,000 or less. And that we won’t go any further than that." Whereas it’s pretty clear on your assessment of the case that it’s a $300-$350,000 sort of case. And the other side knows that as well and you fossick that out of them that they definitely know that it’s a $300,000 minimum case. You have to say to your client ‘I understand that you need this to settle for less than $200,000 but it won’t. You need to stop looking at the litigation process as a way to resolve your financial issues, you need to go and look at your financial issues and solve that problem.’ You can certainly look at what your client wants but sometimes you need to give them very strong advice about what the litigation process can give them.[79]

Mediation is an objective process and the client’s needs are not relevant because the outcome will be determined by the influence of the law.[80]

Both the way that some lawyers respond to their clients’ needs and the small number of lawyers who did not entertain discussion of those needs emphasised the priority of legal issues and arguments in court-connected mediation.

6 Lawyers’ Preparation of Their Clients

In summary, less than one half of the 39 lawyers reported that they considered all of the matters on the checklist in preparation of their clients for mediation. Nearly all practitioners discussed the mediation process and options for settlement with their clients prior to mediation. Most lawyers reported that they gave their clients comprehensive advice in relation to the legal claim prior to mediation. However, some lawyers did not discuss the likely trial outcome or future costs with their clients prior to court-connected mediation. Some of these practitioners may not have discussed these matters at all. A proportion of the interviewees reported that they did not discuss their client’s needs in preparation of their clients for mediation.

There was some recognition by interviewees that there was some need for change in respect of lawyer preparation of themselves and their clients for mediation. Interviewees were asked ‘[w]hat needs to change in relation to the mediation programme at the Supreme Court?’ Three practitioners mentioned that there was a need for an increased amount of preparation for mediation by (other) lawyers.[81] Furthermore, another practitioner felt strongly about the inadequate preparation of some practitioners and recommended the introduction of penalties for lawyers who failed to advise their clients appropriately prior to mediation.[82] Only a small number of comments were made in this vein, but there was clearly some concern within the profession about some lawyer approaches to preparation for mediation. This is consistent with concerns expressed by lawyers practising in other jurisdictions, discussed above.

C Summary of Findings About Lawyers’ Preparation for Court-Connected Mediation

The data painted a picture of considerable variation in mediation preparation by lawyers and suggested a narrowing of the scope of mediation by lawyers at the preparatory phase. The considerable variation in reported practices raised issues about the adequacy of preparation for mediation by a small minority of practitioners. Despite the variation, most lawyers performed most of the anticipated preparatory activities.

In their preparation for mediation, more than 90 per cent of respondents reviewed the file, considered options for settlement, strategies for mediation and the personality of the other lawyer. Similarly, more than 90 per cent discussed the mediation process and options for settlement with their client. A smaller majority (79 per cent) discussed the likely trial outcome with their clients. This is concerning if it suggests that clients of up to 21 per cent of lawyers did not have an analysis of the likely trial outcome against which to evaluate proposed settlements. Some lawyers reported that they expected that the lawyer for the other party and the mediator would reality test the client’s expectations about trial outcomes. This was a shifting of the core role of the legal practitioner. However, an overwhelming majority of lawyers reported a concerted, thorough negotiation preparation prior to court-connected mediation.

The data demonstrated that many lawyers had adopted approaches and practices that mirrored traditional adversarial representation. Many lawyers approached court-connected mediation as they approached other pre-trial and trial processes. The prioritisation of legal over other issues by lawyers was demonstrated. Most considered the strengths and weaknesses of the legal arguments, the legally relevant issues, considered options for settlement and developed strategies for the mediation process. One half did not consider the ‘needs’ (non-legal interests) of the parties to be a relevant consideration in preparation for mediation. Most performed their duty to give comprehensive legal advice to clients prior to mediation. Those lawyers who did discuss their clients’ non-legal interests prior to mediation tended to narrow their clients’ expectations rather than seeking to broaden the scope of the mediation.[83]

Most lawyers prepared their clients for perceived limitations of court-connected mediation as a process that could deliver settlement of legal issues only. In preparation of their clients for mediation, some lawyers informed their clients that they could participate directly in the mediation process. However, many warned their clients about the dangers of saying something detrimental to their legal case.[84]

The findings indicated that some lawyers were pre-determining the scope of discussions and modifying their clients’ expectations prior to the mediation process. This meant that disputant preferences (client interests) may not have been accurately communicated within the mediation process. The narrowing of clients’ expectations occurred in the context of no clear intention from the Court that the mediation process would adopt a narrow scope. On the contrary, the practice reported by mediators demonstrates that there was flexibility to adapt the process.[85]

V DISCUSSION

The dispute resolution landscape of legal practice has continued to expand and evolve since the interviews were conducted in 2006 and 2007. Five years later, mediation is even more entrenched into the practice of law in Australia. Presumably, a greater proportion of Tasmanian lawyers have now engaged in training (whether by course or private study) about dispute resolution and the lawyer’s role in connection to it.

There are many more materials available to support lawyers in their mediation representation in 2013, although there is space for considerably more emphasis on the particular skills involved in supporting clients in consensus-based processes. Legal professional bodies have produced guidelines for practitioners[86] and scholars have written books specifically targeting the Australian lawyer audience.[87] Scholarly discussion of various challenges for lawyers in mediation is published regularly.[88] Continuing professional education relating to lawyers’ mediation practice is now offered.[89] The results of this study demonstrated the need for lawyers to tap into these resources and engage in discussions about the implications of mediation for legal practice. Preparation for mediation is one important aspect.

Current guidelines indicate that to prepare adequately for mediation, lawyers ought to:

• Prepare for the process (check pre-mediation obligations in guidelines, agreement or directions, understand what the mediation will be like, what will happen, where it will be, who will attend, what contributions the lawyer and client will need to make);

• prepare the case (analyse the strengths and weaknesses of the client’s legal case and consider non-legal factors and interests, assess why the matter has not settled to date);

• exchanging information and/or documents (to facilitate greater chances of reaching agreement);

• assist the client to prepare for mediation (explain process, case, develop strategies, check client’s goals and interests);

• devise a mediation strategy (clarify the aim, undertake a risk analysis and link risks to client interests, identify minimally required outcomes, decide upon plan of persuasion); and

• prepare personally to participate effectively (mindfulness, professionalism).[90]

Most of the lawyers who were interviewed were doing most of these things in preparation for mediation. However, the preparation described was very similar to preparation for trial, with little focus upon the non-legal interests of the client. The client’s aim tended to fall outside the boundaries of the lawyer’s legal analysis. The consequence was a narrowing of the potential of the court-connected mediation process. This poses a lost opportunity for a non-judicial court-connected dispute resolution process to be used to pursue outcomes that fall beyond ‘the limited remedial imagination’ of the courts.[91] It demonstrates clearly that the lawyers’ gatekeeper role in dispute management can limit the possibilities and the ‘promise’ of mediation, particularly where the lawyer does not understand what mediation could offer, how it differs fundamentally from a trial event and what they can do to maximise the effectiveness of the process.

D Future Further Responses

To enhance court-connected mediation, it is desirable that there be more clear dissemination of information about how lawyers can prepare effectively for court-connected mediation. This could be done by programme specific guidelines, law societies, firms or continuing legal education providers. There is scope for programme providers to offer tailored guidelines for the lawyers who appear in their mediation programmes. This might clarify the anticipated scope of mediation within a court-connected programme and the range of roles that lawyers may play within the mediation.

Legal educators should also be mindful of the need for law graduates to be equipped with skills and knowledge that will enable them to work effectively in the modern dispute resolution environment. The legal academy has a vital role to play in preparing new generations of lawyers.

VI CONCLUSION

Court-connected mediation requires lawyers to prepare in different ways than lawyer negotiation or trial. There is scope for lawyers to have a greater awareness of the potential benefits that could be derived from active client participation, focus on non-legal issues and pursuit of creative outcomes. These possibilities are best explored at the preparatory phase. This study revealed that there is room for greater awareness among the Tasmanian legal profession about how they could enhance their client’s mediation experience, starting with a more comprehensive undertaking of preparation activities. The data are now dated and it is probably timely for a fresh study to gather new data, that could be compared to the data collected in 2006 and 2007. There is scope for more empirical research in Australia into the way that lawyers understand, prepare for, and approach their role in court-connected mediation as well as other dispute resolution processes.

Appendix A: Lawyer Interview Schedule

This interview is in relation to your general experience of mediation at the Supreme Court of Tasmania.

1. Which of the following best describes your main case load?

• Commercial

• Personal Injuries -Plaintiff

• Personal Injuries –Defendant Family Law

• Mixed practice

• Other _____________________

2. Approximately how many mediation conferences have you participated in over the last 12 months?

• 1-10

• 11-20

• 21-30

• 31-40

• 41-50

• 51-60

• 61-70

• 71-80

• 81-90

• 91 or more

3. How frequently do you advise your clients in relation to dispute resolution processes other than litigation?

• Always

• Usually

• Sometimes

• Never

4. How frequently do you attempt to resolve your clients’ disputes by negotiation (other than during a mediation process)?

• Always

• Usually

• Sometimes

• Never

5. How frequently do you advise your clients to participate in mediation?

• Always

• Usually

• Sometimes

• Never

6. What difference does mediation in the Supreme Court make to the way you practice?

7. What skills and training does a legal practitioner need to participate effectively in mediation? How are those skills developed?

• Have you undertaken any formal training in mediation or negotiation? [This question was asked in a follow up email to many lawyers].

8. How do you prepare yourself and your client for mediation?

9. Which of the following do you typically discuss with your clients to prepare for mediation?

• Likely trial outcome

• Future costs

• Options for settlement

• Mediation process

• Your client’s needs regarding outcome

10. Which of the following do you typically do to prepare yourself for mediation?

• Review the file

• Consider options for settlement

• Consider strategies

• Reflect on the personality of the opposing legal practitioner

• Find out who’s the mediator

• Consider the needs of the parties

11. How does the degree of preparation you typically make for a mediation conference compare to the preparation you typically make for a trial?

• Same amount

• Slightly less

• Significantly less

• No preparation

12. What advantages does the mediation process have?

13. What disadvantages does the mediation process have?

14. What are we losing by having so many cases go to mediation?

15. What are we gaining from so many cases going to mediation?

16. How would a typical mediation work?

17. Describe your best experience at mediation

18. Describe your worst experience at mediation

19. What should remain the same about the Supreme Court’s program?

20. What needs to change about the Supreme Court’s program?

21. Is mediation as practised in the Supreme Court of Tasmania substantially different from unassisted lawyer negotiation?

22. Is mediation generally substantially different from unassisted lawyer negotiation?

23. Which of the following best describes the legal practitioner’s role in court-connected mediation? (You may nominate more than one)

• Advocate

• Advisor

• Negotiator

• Other___________________

24. Should a mediator ever advise disputants about the value of a claim, or the likely result if the matter proceeded to trial? In what circumstances?

25. Is mediation NOT appropriate in any of the following circumstances?

• Before litigation has commenced

• Where liability is in issue

• Before completion of pleadings

• Before completion of discovery

• Before the matter is certified ready for trial

• After the matter is certified ready for trial

• After trial has commenced

• Where there is an imbalance of power between the parties

• Where the difference between the positions of the parties is large

• Where the issues are complex

• Matter has been in the litigation system for a long time

• High degree of animosity between the parties

• Both parties object to referral to mediation

• One party objects to referral to mediation

• Other (please specify)__________________________________

26. Are there any comments you would like to make about mediation, particularly in relation to the Supreme Court of Tasmania’s program?

[The following questions were asked of some lawyers in order to identify the reasons for the failure of the original research method]

27. Did you receive forms regarding the telephone surveys in relation to particular mediation conferences?

28. Did you send them to your clients? Why not?

I Want Information!

Beneficiaries’ Basic Right or Court Controlled Discretion?

G E DAL PONT[∗]

Abstract

Core to the concept of a trust is that its beneficiaries have an entitlement to secure its proper administration. Essential to the effective exercise of this entitlement is the ability to access information relating to the management of the trust property. The notion that beneficiaries have an equitable interest in the trust property traditionally translated into beneficiaries’ access to trust information being perceived as evincing a proprietary foundation. This has been challenged in the last decade or so, in large part as a result of the incidents of the modern discretionary trust. In its place suggestions have been made for a broad curial discretion to govern beneficiaries’ access to trust information. This article queries moves in this direction, not only as inconsistent with the nature of a trust but for fear of prompting greater litigation over trusts.

I TRUSTEE DUTY AND CORRESPONDING BENEFICIARY RIGHT

Litigation surrounding the access by beneficiaries to information relating to the management of trust property has surfaced perennially over the years. Its backdrop is hardly obscure. Underscoring the concept of a trust is duality so far as ownership of trust property is concerned. Trustees, by definition, have legal ownership of trust property, which carries an entitlement, at common law, to deal with the property as and how they wish, like any other persons who hold unencumbered title to property. But insofar as trustees are obliged, in equity, to manage the trust property for the benefit of others — the beneficiaries — equity has long since curtailed, by fiduciary and other duties, the trustees’ otherwise plenary ‘enjoyment’ of the trust property. That ‘enjoyment’ yields to the interests of the beneficiaries, who have an entitlement — and the most compelling individual and collective interest — to secure the proper administration of the trust property.

It is for this reason that equity located certainty of object as an essential element of the trust relationship. Were an alleged trust to lack a ‘definite object’ — ‘somebody, in whose favour the court can decree performance’ — what would remain is ‘an uncontrollable power of disposition’, which is ‘ownership and not trust’.[92] To effectively monitor the administration of the trust property, it went without saying that beneficiaries needed information regarding the performance of the trustees’ duties and powers. To this end, equity imposed on trustees a ‘duty to account’ to beneficiaries.[93] That duties almost invariably spawn correlative rights in the person(s) to whom the duties are owed in turn prompted the frequent reference, in both the case law and commentaries, to the beneficiaries’ ‘right’ to information concerning the trust.

Yet as with many so-called ‘rights’, the beneficiaries’ general law right to information is not unqualified. In this brief article my aim is to note some relevant qualifications against the backdrop of recent (and, for context, not so recent) case law, which challenge the historical understanding of the beneficiaries’ ‘right’, with particular emphasis in the second half of the paper on how these developments have sought to address a tension between trustee accountability and settlor confidentiality.

As a preliminary observation, it is necessary to say a little more regarding the duality of ownership notion mentioned above. Although the reference to duality here implies that beneficiaries collectively have ownership of the trust property, in equity, it is not always accurate to describe beneficiaries’ interests as having an ‘ownership’ flavour. A ‘dogma’ that, where legal ownership vests in a trustee, equitable ‘ownership’ must in each case be vested in someone else, has been rejected by the High Court.[94] And as ownership brings with it connotations of ‘property’, the extent to which beneficiaries’ interests in a trust have a proprietary flavour may well be queried.

It is apt, at this time, to explain the use of the term ‘property’ in this context. Beneficiaries’ interests can be described as proprietary in the sense that, collectively, they have an equitable interest in the trust property (namely its corpus). Proprietary notions are also legitimately utilised in the context of the distribution (or appointment) of the trust corpus or, more commonly, income. So beneficiaries of so-called fixed trusts are said to have a right to receive a fixed proportion of the trust income and, usually upon the termination of the trust, a fixed proportion of the trust corpus. Because, under the terms of the trust, the beneficiary has an entitlement to receive distributions, the ‘interest’ of the beneficiary is often branded as proprietary. On this reasoning, as beneficiaries of discretionary trusts are not entitled to call for any part of the trust income or corpus, but await in the hope of having the trustee exercise his or her discretion as to appointment in their favour, they are usually described as lacking an interest of a proprietary nature in the trust estate.[95]

There are further wrinkles, moreover, in speaking of ‘property’ interests in the trusts context. For instance, the modern superannuation trust, aside from involving the ‘beneficiary’ contributing in part to the trust property, generally reserves any right to claim the fund until some future date. It is, in this sense, a claim to future property that, at least for the beneficiary, is contingent upon reaching a certain age. Conversely, a unit trust ordinarily envisages an existing interest in property in the form of ‘an aliquot share or interest in the undivided assets of a trust that are held for investment or profit by the trustee for the benefit of the unit holders or beneficiaries of that unit trust’,[96] which can, subject to the terms of the trust, be transferable.

II CHARACTERISATION OF BENEFICIARY’S RIGHT — ‘PROPRIETARY’?

As the foregoing reveals, notions of ownership and property are ostensibly fluid in nature in the trusts context (as in others). Even the traditional characterisation of a discretionary beneficiary’s ‘interest’ — as no more than an expectancy, and thus non-proprietary in the sense noted above — has been challenged of late in the insolvency and family law statutory environment.[97] And at the other end of the spectrum, the common assumption that unitholders have a proprietary interest in the trust property has been challenged in several caveat cases.[98]

Yet to speak in terms of ‘property’, as distinct from mere personal entitlements or obligations, is not simply a matter of nomenclature. Equity accords to ‘proprietary’ interests a higher status than those of a personal nature (as does the common law),[99] and courts of equity (in line with their common law counterparts) have traditionally been loathe to interfere with existing proprietary rights, especially under the guise of a judicial discretion.[100] Personal claims or entitlements in equity, conversely, are grounded heavily in discretion, inherent in the maxim that equity acts in personam.

Against this backdrop, it is perhaps unsurprising that the proprietary-personal divide should surface on the issue of beneficiaries’ access to trust information. In a sense, the fact that the trust is a curious amalgam of the personal and the proprietary[101] presents an invitation for debate, which has hardly proven foreign to the characterisation of a beneficiary’s ‘right’ to information. Courts historically tended to view this ‘right’ to information as one consonant with the right to access and view ‘trust documents’. Perhaps the leading judicial statement here is that of Lord Wrenbury in O’Rourke v Darbishire:

If the plaintiff is right in saying that he is a beneficiary, and if the documents are documents belonging to the executors as executors,[102] he has a right to access to the documents which he desires to inspect upon what has been called in the judgments in this case a proprietary right. The beneficiary is entitled to see all trust documents because they are trust documents and because he is a beneficiary. They are in this sense his own. Action or no action, he is entitled to access to them. This has nothing to do with discovery. The right to discovery is a right to see someone else’s documents. The proprietary right is a right to access to documents which are your own. No question of professional privilege arises in such a case. Documents containing professional advice taken by the executors as trustees contain advice taken by trustees for their cestuis que trust, and the beneficiaries are entitled to see them because they are beneficiaries. [103]

Other than Lord Parmoor, who made more oblique statements directed to an ostensibly similar object,[104] those observations, in so far as they target the nature of a beneficiary’s right, saw no parallel in the speeches of the other Law Lords. They must be viewed in the context of the factual scenario before the court, which, as the extract above hints at, involved the parameters of a claim to legal professional privilege by a trustee. It is not disputed that joint privilege can arise over legal advice sought by a trustee in the ordinary course, such that a beneficiary is entitled to view that advice.[105] But it does not necessarily follow that this is the consequence of any proprietary interest in the documents themselves.

III ‘PROPERTY’ IN TRUST DOCUMENTS OR INFORMATION

Lord Wrenbury’s remarks have, in any event, proven influential in the characterisation of beneficiaries’ ‘rights’ to information. What underscores his Lordship’s observations, and had for years been accepted legal principle, is that ‘trust documents’, however defined, ‘belong’ to the beneficiaries. They are, in this sense, the property of the beneficiaries. This underscored the judgments of members of the English Court of Appeal in the leading case of Re Londonderry’s Settlement[106] some 45 years later, which clearly continued to inform Australian law, as is evident from the majority judgments delivered in Hartigan Nominees Pty Ltd v Rydge.[107]

The property here seems to have been viewed as property in the documents themselves, that is, the (traditionally) paper on which the information was contained. This (too) conveniently avoided the old chestnut of whether or not information itself can constitute property.[108] Equity, after all, never went so far as to brand information as property, preferring in the main to protect information via an in personam obligation. The equitable doctrine of confidential information is the exemplar in this regard.

Upon this proprietary foundation, the relevant inquiry comes down to whether or not the documents to which the beneficiaries seek access are ‘trust documents’. If they are ‘trust documents’, they are the property of the beneficiaries, and thus access is an entitlement that should not be denied in the exercise of judicial discretion. Salmon LJ in Re Londonderry’s Settlement,[109] to this end, opined that ‘trust documents’ contain ‘information about the trust which the beneficiaries are entitled to know’, and thus branded them as documents in which ‘the beneficiaries have a proprietary interest ... and, accordingly, are entitled to see’. This characterisation did not always prove sufficiently discriminatory to clearly distinguish documents that were trust documents from those that were not. Difficulties could arise where alleged trust documents contained information that the beneficiaries were not entitled to know — in Londonderry, reasons for discretionary decisions as to appointment, and in Hartigan Nominees, information the creator of the trust supplied in confidence. Yet the decided cases revealed no insurmountable challenges in setting parameters to accessing information.

It must be understood, however, that the proprietary foundation for beneficiaries’ access to trust information that emanated from O’Rourke v Darbishire, and was confirmed in Londonderry, owed its genesis against a trusts law backdrop punctuated by the prevalence of the fixed trust. Each case preceded the burgeoning use of the discretionary trust following the House of Lords’ 1971 decision in McPhail v Doulton.[110]

Lord Wrenbury’s focus on property was hardly surprising, given that the interests of beneficiaries of fixed trusts have traditionally been viewed in proprietary terms. It stood to reason that those beneficiaries should be entitled to a property interest — that is, a right — in ‘trust documents’. This reasoning has, as appears below, been challenged by the modern discretionary trust, the beneficiaries of which ordinarily have no more than an expectancy of receiving a distribution from the trust, and thus no property rights as such. The question may be asked: should a lack of a property right in the trust estate — namely a right to call for income or corpus — translate to a corresponding lack of a property interest in (or right to) trust documents? Expressed another way, does trustee discretion to appoint translate to (court) discretion to provide information? Or are the two unrelated?

If the judgment of Mahoney JA in Hartigan Nominees Pty Ltd v Rydge serves as a guide, it cannot be assumed that property in the documents in question vests as a result of a correlative proprietary interest in any particular asset of the trust. The property attaches as a result of being a beneficiary, not as a result, it seems, of the nature of the beneficiaries’ interest in the trust property.[111] His Honour explained the point this way:

[T]he right of a beneficiary to have on request inspection of documents or disclosure of information in relation to the trust is, in general, limited to documents and information which is — or is in the sense here relevant — the property of the trust. It does not extend to documents or information as to which, as a beneficiary, he has no proprietary interest. It is not necessary that he have in it a present proprietary interest quantifiable in nature in a specific asset. A beneficiary may have an interest in it as part of an unadministered fund. But that which is sought must, in the relevant sense, be the property of the trust. [112]

Interestingly, earlier in the judgment Mahoney JA had queried whether the right in question should exist in the event of a request for information made by ‘a person who is only a possible beneficiary under a discretionary trust’.[113] His concern was that the class of possible beneficiaries here ‘may be extensive and, to an extent, the persons who are or may be a member of the class may not be clearly defined’. As to the latter point, though, sufficient definition to meet the ‘criterion certainty test’ is a prerequisite to a valid discretionary trust.[114] And if Mahoney JA, by referring to a beneficiary with an interest ‘as part of an unadministered fund’, had in mind the beneficiary of a deceased estate prior to its completed administration, the law is clear that such a person has at this time no more than a right to secure the proper administration of the estate.[115] That right is one shared with the beneficiaries of discretionary trusts, and lies at the core of the beneficiary principle.

To the extent that the ‘right’ is grounded in the beneficiary principle, that a beneficiary has no fixed entitlement to call for any part of the trust income or corpus should make little difference to his or her standing to seek information. This is because, whether the trust is a fixed or discretionary one, or some hybrid between the two, its beneficiaries have an entitlement to secure its proper administration. Were that right confined to beneficiaries entitled to call for any part of the trust income or corpus, trustees of discretionary trusts could escape accountability and, in the words of Sir William Grant MR noted earlier, would enjoy ‘ownership and not trust’.[116]

IV SHIFT FROM ‘PROPERTY’ TO ‘DISCRETION’?

The foregoing sets the stage for a 2003 Privy Council decision, Schmidt v Rosewood Trust Ltd,[117] the upshot of which remains to be fully understood. What is clear is that Lord Walker, who delivered the advice of the Board, sought to move away from the proprietary foundation underscoring beneficiaries’ access to trust information. His Lordship did not find it surprising that Lord Wrenbury’s remarks in O’Rourke v Darbishire[118] had been cited so often, ‘since they are a vivid expression of the basic distinction between the right of a beneficiary arising under the law of trusts (which most would regard as part of the law of property) and the right of a litigant to disclosure of his opponent’s documents (which is part of the law of procedure and evidence)’.[119] But this did not render those remarks ‘a reasoned or binding decision that a beneficiary’s right or claim to disclosure of trust documents or information must always have the proprietary basis of a transmissible interest in trust property’, as this was not an issue in O’Rourke v Darbishire. The Board instead favoured a different approach, which it expressed in the following language:

Their Lordships consider that the more principled and correct approach is to regard the right to seek disclosure of trust documents as one aspect of the court’s inherent jurisdiction to supervise, and if necessary to intervene in, the administration of trusts. The right to seek the court’s intervention does not depend on entitlement to a fixed and transmissible beneficial interest. The object of a discretion (including a mere power) may also be entitled to protection from a court of equity, although the circumstances in which he may seek protection, and the nature of the protection he may expect to obtain, will depend on the court’s discretion ... [120]

On a narrow reading of the above, his Lordship was arguably doing no more than consigning to history the view that a beneficiary’s access to trust documents is grounded in any property interest. There is also the confirmation, not unheralded in the previous case law,[121] that access to trust information is not confined beneficiaries of fixed trusts but, in line with the beneficiary principle — itself underscored by the court’s power to supervise trusts — can accrue to beneficiaries of discretionary trusts. The similarities between discretionary beneficiaries and objects of a power of appointment[122] meant, moreover, that distinguishing between the two for this purpose lacked a basis in principle. Lord Walker went on to emphasise that a shift from the proprietary foundation was no ‘open door’ to information, and that historical restrictions on information remained. This appears from the following remarks:

However the recent cases also confirm ... that no beneficiary (and least of all a discretionary object) has any entitlement as of right to disclosure of anything which can plausibly be described as a trust document. Especially when there are issues as to personal or commercial confidentiality, the court may have to balance the competing interests of different beneficiaries, the trustees themselves, and third parties. Disclosure may have to be limited and safeguards may have to be put in place. Evaluation of the claims of a beneficiary (and especially of a discretionary object) may be an important part of the balancing exercise which the court has to perform on the materials placed before it. In many cases the court may have no difficulty in concluding that an applicant with no more than a theoretical possibility of benefit ought not to be granted any relief. [123]

The difficulties raised by Lord Walker’s statements, however, focus on the extent to which they have made the court’s discretion the ultimate determinant of beneficiaries’ access to trust information. If so, it is no longer correct to speak of a beneficiary’s ‘right’ to that information. There is an ostensible shift from an application to the court to enforce an existing (proprietary) entitlement to documents to an application to the court in its discretion for an order requiring the disclosure of information.

This, in turn, raises the prospect that what had in the past been assumed to come within beneficiaries’ rights to information may not be so. At the same time, the introduction of judicial discretion in granting the relevant remedy produces scope for the court to order trustees to disclose to beneficiaries, whether with or without conditions, information previously assumed to have been outside that to which beneficiaries were entitled. An example could be trustees’ reasons for decisions as to appointment, which had at least since Re Londonderry been generally seen as beyond the province of the beneficiaries. Another example, which is discussed below in more detail, is information that the settlor has directed remain confidential. It may well be, then, that under this approach the need to distinguish ‘trust documents’ from other documents is reduced.

Yet judicial discretion, while utile in ostensibly securing justice in each individual case, has its price. Areas of law punctuated by judicial discretion are commonly those that witness the greatest litigation. The reason is not difficult to discern. Set rules, for their faults, foster predictability in judicial outcomes; broad discretion, even if ‘judicially’ exercised,[124] is far less less amenable to predictability. It is therefore unsurprising that litigation over access to trust information, where the Schmidt discretion has been in issue, has reached the adjudicative stage in the United Kingdom, Australia and New Zealand.[125]

V ANTIPODEAN RESPONSES

Gzell J in Avanes v Marshall[126] certainly saw Schmidt as shifting the legal goalposts. His Honour noted that whereas the decision of the English Court of Appeal in Re Londonderry’s Settlement proceeded on the basis that there is an entitlement to inspect trust documents subject to exceptions, under the reasoning in Schmidt ‘there is no right to inspection of trust documents and it is for the court to decide whether inspection should be granted by balancing competing interests’.[127] The ultimate existence of judicial discretion did not, said his Honour, abrogate the trustee’s duty to keep accounts or to grant a beneficiary access to them. On this view, there remains a duty, albeit one bookended not by a corresponding right but a judicial determination of what information should be disclosed.[128] Gzell J endorsed the Schmidt approach. The New Zealand High Court in Foreman v Kingstone[129] and, more recently, Hammerschlag J in Silkman v Shakespeare Haney Securities Ltd,[130] have done likewise. Interestingly, in each of these cases the outcome would have been the same had the Londonderry approach been applied.

At least from an Australian perspective, this seems an odd course of action. The leading Australian case, also from New South Wales, Hartigan Nominees Pty Ltd v Rydge,[131] evinced no quantum shift from Londonderry in its two majority judgments. To the contrary, Mahoney and Sheller JJA largely endorsed the principles espoused in Londonderry.[132] If indeed Schmidt is a departure from Londonderry, one would expect the New South Wales Court of Appeal to be the driver for change, at least in New South Wales. That Schmidt is not even binding in the United Kingdom, given that it was a Privy Council decision (emanating from the Isle of Man), makes it the more surprising that it should have enjoyed such an uncritical welcome in the Antipodes.

It is curious to note, to this end, that the Board in Schmidt, immediately after its critical statement directed to the court’s inherent jurisdiction, expressed ‘general agreement’ with the approach adopted in the judgments of Kirby P and Sheller JA in Hartigan Nominees.[133] The agreement here targeted their Honours’ shift from a proprietary basis for access to information, but conveniently made no mention of the fact that the majority in Hartigan in no other way purported to interfere with a beneficiary’s ‘right’ to information.[134]

Orthodoxy prevailed, however, when Schmidt was argued before Bryson AJ in McDonald v Ellis,[135] decided some six months after Avanes. At least so far as beneficiaries in non-discretionary trusts were concerned, his Honour considered that the majority judgments in Hartigan Nominees should be treated as authoritative by first instance New South Wales judges.[136] This Bryson AJ interpreted as meaning that a beneficiary is entitled to see trust documents and have information about trust property, which entitlement has a proprietary foundation. Any ostensible doctrinal hurdles to describing the rights of discretionary beneficiaries as proprietary in this context were insufficient, said his Honour, to justify the ‘drastic solution’ that access to trust documents should be relegated to the discretion of the court.[137]

In any event, existing New South Wales authority is against the proposition that discretionary beneficiaries have no entitlement to trust information.[138] And it may be added that any difficulties in distinguishing trust documents from non-trust documents are arguably less problematic in practice than those generated by opening the door to a wide judicial discretion. There certainly did not appear, before Gzell J’s ex tempore decision in Avanes, any intractable hurdles in determining the parameters of the beneficiaries’ right to information.

VI IMPACT ON CONFIDENTIALITY OBLIGATIONS

Aside from the uncertainty inherent in the Schmidt ‘discretionary’ approach, and the attendant litigation it is likely to spawn, there is its potential to upset confidential arrangements established by the settlor (or a person at the settlor’s direction).[139] The crucial issue in Hartigan Nominees Pty Ltd v Rydge[140] sets the scene. The issue was whether a beneficiary of a discretionary trust, who was the grandchild of its creator,[141] could compel its trustee to disclose a memorandum of wishes provided by the creator. A majority of the court (per Mahoney and Sheller JA, Kirby P dissenting) held that this document, which expressed the creator’s wishes regarding the distribution of the trust estate, should not be disclosed because the creator had supplied it to the trustees on a confidential basis. That the creator did not disclose his wishes in, or in a document attached to, the trust instrument, but delivered a separate memorandum of wishes to the trustees, justified that inference. This meant, said Sheller JA, that the trustees obtained the contents of the memorandum in circumstances of confidence, which bound them not to disclose the contents to the respondent and to withhold the memorandum from him.[142] Mahoney JA emphasized the importance of confidence in the family environment:

In a discretionary trust of this kind, the settlor has placed confidence in his trustee and has on that basis transferred property to him. It has, I think, been the purpose of the law to respect that trust. It depends upon confidence and confidentiality. The settlor seeks to have the trustee resolve, without unnecessary abrasion, the conflicting claims of persons in an area, the family, where disputes are apt to be bruising. In case of this kind, if a settlor’s wishes cannot be dealt with in confidence, the purpose of the trust may be defeated. [143]

These remarks echoed those of Danckwerts LJ nearly 30 years earlier in Re Londonderry’s Settlement,[144] also in the family environment, that trustees who are given discretionary trusts that involve a decision upon matters between beneficiaries are given ‘a confidential role’. Although this observation formed the backdrop to the court’s determination that trustees are not obliged to disclose to beneficiaries reasons for the exercise of their discretion as to appointment, it does highlight the value courts place on confidence vested by a settlor in his or her trustee(s). There was, tellingly, no indication in Lord Walker’s speech in Schmidt of any intention to depart from the confidentiality that underscored the judgments in Londonderry.[145]

Hartigan is entirely consistent with the proprietary foundation for beneficiaries’ access to trust information. The reason why the memorandum of wishes fell outside the beneficiaries’ purview, and thus could not be accessed, was that it was not a trust document. It was not, accordingly, property of the trust (and thus the beneficiaries), but the property of the trustee.

The foregoing does not obviate the tension between the need for accountability in trustees for their decision-making and the need to preserve an obligation of confidentiality. The majority in Hartigan Nominees sided with the latter in the event of conflict, whereas the dissentient, Kirby P, sided with the former. His Honour saw the memorandum of wishes as a trust document, ‘an essential component of, or companion to, the trust deed itself’.[146] And although accepting that accompanying disclosure of a confidential document of this kind could in some instances be ‘hurt, embarrassment and general consternation’, he opined that this must be balanced against ‘the suspicion which will attend a refusal to give access to a document of great importance to the determination of the financial and other benefits received by beneficiaries’.[147]

Kirby P nonetheless conceded the possibility that a different outcome might follow had a settlor expressly asked the trustees to keep the memorandum of wishes secret. Accepting that his Honour expressed no firm conclusion to this end, it is nonetheless difficult to appreciate why inferred confidentiality should be treated any different to express confidentiality. The law generally makes no such distinction. Perhaps what can be said is that the court can be more confident of the settlor’s intention where it is manifested expressly than where reliance upon inference is necessary.

In any event, courts do not appear to have been too circumspect in making the said inference. The separation of the memorandum or wish letter from the trust instrument, in the context of distributions of property within the (extended) family unit, has proven sufficient for this purpose. In the subsequent decision in Breakspear v Ackland[148] Briggs J remarked that, as the defining characteristic of a ‘wish letter’ is that it contains material that the settlor desires that the trustees should take into account when exercising their discretionary powers, it is created for ‘the sole purpose of serving and facilitating an inherently confidential process’. His Lordship saw it as ‘axiomatic’ that a document created for the sole or dominant purpose of being used ‘in furtherance of an inherently confidential process is itself properly to be regarded as confidential, to substantially the same extent and effect as the process which it is intended to serve’.[149]

VII OVERRIDING CONFIDENTIALITY?

Emphasising the confidential nature of wish letters did not, however, lead Briggs J to cast upon them blanket protection from disclosure to beneficiaries. Instead his Lordship envisaged that even an express obligation of confidentiality imposed by the settlor upon the trustees could, pursuant to the curial discretion espoused in Schmidt, be relaxed or overridden entirely by court order.[150] On a broad reading of Lord Walker’s speech, this indeed is open as an exercise of judicial discretion. But where Briggs J arguably went further than even a broad reading of Schmidt would allow was in accepting that trustees can, sans court approval, elect to disregard a confidentiality obligation imposed by the settlor. The essence of his Lordship’s reasoning appears from the following extract:

In the absence of special terms, the confidentiality in which a wish letter is enfolded is something given to the trustees for them to use, on a fiduciary basis, in accordance with their best judgment and as to the interests of the beneficiaries and the sound administration of the trust. Once the settlor has completely constituted the trust, and sent his wish letter, it seems to me that the preservation, judicious relaxation or abandonment of that confidence is a matter for the trustees or, in an appropriate case, for the court.

Although this may be a matter to be decided on another occasion, I am not persuaded that it is either appropriate or legitimate for a settlor to fetter the trustees’ discretion in that respect, either by the inclusion of special terms as to confidentiality in the wish letter itself or, still less, on any subsequent occasion. In this regard I have not, with respect, been persuaded by what appears to have been the contrary view of the majority in the Hartigan Nominees case, or by the opinions of those others for whom it appears that the express imposition of an obligation of confidence makes all the difference. Trustees are fiduciaries exclusively for their beneficiaries and should not in my opinion be asked to accept, nor should they without good cause accept, restraints upon their use of relevant information which would prevent disclosure even where, in their view, disclosure was preferable to the continued maintenance of confidence. [151]

Unilateral trustee election to ignore confidentiality obligations counters accepted principle when it comes to the preservation of those obligations. A contracting party, for instance, cannot without committing a breach of contract digress from a confidentiality obligation assumed in the contract. Even without contractual protection of information, equity has long exercised a jurisdiction directed to protecting the confidentiality of information communicated in confidential circumstances. A trustee who undertakes to maintain confidential the terms of a wish letter should hardly be able to breach confidence because he or she considers it appropriate to do so. The public interest defence to a breach of confidence, even assuming it forms part of the Australian law,[152] seems difficult to maintain in this context.[153] That in the common case the settlor (or quasi-settlor) of the trust is likely to be deceased at the time when the confidentiality obligation is triggered suggests a more, not less, compelling ground to preserve his or her wishes. There is, moreover, a challenge in fashioning an appropriate remedy here for a breach of confidence.

Ultimately, the law assumes that settlors (or testators) are better positioned to make judgments as to the disposition of their estate than other persons and, in the testamentary context; freedom of testation is, at general law, sacrosanct. The same largely underscores freedom of disposition of property generally. Only if sanctioned by statutorily conferred jurisdiction or otherwise undermined by contrary public policy is there ordinarily any scope for a trustee to disregard the settlor’s instructions. That the document in issue is a non-binding expression of the settlor’s wishes does not render the confidentiality to which it is subject any less pressing. The obligation is confidentiality; the discretion usually relates to appointment.

An analogy derives from the law of secret trusts. From early times courts have recognised the legitimacy of the disposition of property outside the public terms of a will, in many instances established in this manner with the specific objective of maintaining the secrecy of the ultimate beneficiary. Granted that the analogy is not exact — the trustee is to hold property for one or more secret beneficiaries, as opposed to exercising a discretion in line with non-mandatory wishes — but the similarities so far as confidentiality is concerned are evident. No suggestion of the trustee unilaterally abrogating the secrecy can be found in the case law, nor of the court compelling the disclosure of the relevant secret.

The question then necessarily arises as to whether policy should dictate a different outcome where the settlor purports to direct trustees in the exercise of their discretion via an alleged confidential communication. One way of approaching this scenario is to brand such a communication as a prima facie trust document, and thus within the beneficiaries’ domain.[154] Conversely, letters of wishes are not trust documents, it can be reasoned, because they impose no obligations on trustees or confer any entitlements on beneficiaries.[155] Alternatively, it may be seen as an illegitimate fetter on trustee discretion, and thus unenforceable for infringing public policy. The reality, however, is that a settlor will likely choose as trustees persons who can be trusted to follow his or her instructions. The distinction in practice, therefore, between a non-mandatory wish letter and a direction may be more of form than substance.

Preferring confidentiality ahead of accountability — which better seems to accord with legal principle — is not without its challenges. For instance, if a wish letter is to remain confidential, and is cited as a ground to refuse a beneficiary a (further) distribution from the trust, it leaves that beneficiary with no means of ascertaining whether the trustees have in fact acted in line with the settlor’s wishes. Nor will the court necessarily be positioned to make this assessment, as the court may (as in Hartigan Nominees) not be privy to the contents of the wish letter (although this is without prejudice to the court requesting to view the letter).

Yet at the same time this outcome is hardly unheralded. The Londonderry ruling, on this point endorsed in Hartigan Nominees, made it clear that trustees are not obliged to disclose to beneficiaries reasons for their discretionary decisions to make, or not make, an appointment of trust income or capital. And it is established that courts will not review the exercise of trustee discretion absent evidence of bad faith or a lack of real and genuine consideration.[156] The position of beneficiaries thus differs little whether or not a wish letter informs trustee discretion. The point is of especial significance in the wish letter context because those who seek to view those letters commonly seek thereby to discover reasons why they have been excluded from benefit. It is also of significance because, in the event that a confidential wish letter is supplied, the curial reticence to review the exercise of trustee discretion has a further justification: the confidentiality imposed.

VIII CONCLUSION

Whilst the law as it stood immediately post-Hartigan Nominees may not have been a paragon of clarity, and left the parameters of beneficiaries’ access to trust information somewhat blurred, it was not so deficient as to call for judicial revolution. Though there were some cases testing the boundaries of the law as stated in Hartigan Nominees, these were at the margins, not at the core of the relevant principles.

Yet Lord Walker’s speech in Schmidt, should it receive broad(er) endorsement in Australia, has the potential to create (far) greater uncertainty. It is curious that, stemming from a jurisdiction that has withstood the Australian push towards remedies over property grounded in unconscionable conduct, for fear of creating uncertainty,[157] is a judgment — Schmidt — that purports to shift the focus from proprietary rights to documents to judicial discretion as the starting point. Unless the parameters of this discretion are clearly established, this represents what appears an open invitation for beneficiaries to litigate to secure access to information, and for trustees to defend the claims. Areas of law where relief is grounded in broad judicial discretion are, after all, frequent candidates for ongoing litigation, especially where it involves a contest over a fund and there is a belief, often inaccurate, that costs may be met from the fund. To this end, suggestions that Schmidt improves the current law via its introduction of greater flexibility[158] arguably underplay its drawbacks. The same may be said of suggestions that the Schmidt approach heralds no more than an incremental shift.[159]

If, moreover, its upshot and development in Breakspear is to carry favour in Australia, there is the prospect that obligations of confidentiality imposed on and undertaken by trustees could, in some instances, be sacrificed, most likely at the altar of the most demanding beneficiaries. If so, the need for certainty and predictability may well call, as suggested by a New Zealand commentator, for a statutory catalogue of the scope of trustee obligations and beneficiary entitlements in this context.[160]

Ultimately, Schmidt and its progeny illustrate the notion that the further one moves away from concepts grounded in property rights to those grounded in personal claims, the greater the instability underscoring the consequent duties, entitlements and remedies. It is indeed questionable whether this is a desirable outcome.


*Dr Olivia Rundle BA-LLB (Tas), PhD (Tas), Lecturer in Law, Faculty of Law, University of Tasmania.

1 This article contains abridged and revised extracts from the author’s PhD thesis: Olivia Rundle, How Court-Connection and Lawyers’ Perspectives Have Shaped Court-Connected Mediation Practice in the Supreme Court of Tasmania (PhD Thesis, University of Tasmania, 2010).

[2] Penny Brooker and Anthony Lavers, ‘Mediation Outcomes: Lawyers’ Experience With Commercial and Construction Mediation in the United Kingdom’ (2005) 5 Pepperdine Dispute Resolution Law Journal 161, 162.

[3] Julie Macfarlane, The New Lawyer: How Settlement is Transforming the Practice of Law (UBC Press, 2008).

[4] Nancy A Welsh, ‘Looking Down the Road Less Travelled: Challenges to Persuading the Legal Profession to Define Problems More Humanistically’ (2008) 1 Journal of Dispute Resolution 45, 48.

[5] Dorothy J Della Noce, Joseph P Folger and James R Antes, ‘Assimilative, Autonomous, or Synergistic Visions: How Mediation Programs in Florida Address the Dilemma of Court Connection’ (2002-2003) 3 Pepperdine Dispute Resolution Law Journal 11.

[6] The description of the research context and method in this article was also contained in Olivia Rundle, ‘Lawyers’ Perspectives on “What is Court-Connected Mediation For?”’ (2013) 20 (1) International Journal of the Legal Profession 1 <http://dx.doi.org/10.1080/09695958.2012.752150> .

[7] Productivity Commission, ‘Report on Government Services 2007: Part C Justice’ (Report,

Steering Committee for the Review of Government Service Provision, 2007) Table 6A.2.

[8] Alternative Dispute Resolution Act 2001 (Tas).

[9] Torts matters were chosen because these types of matters formed the overwhelming majority of mediations at the Court in the relevant time periods.

[10] These finalisations include matters that were not defended, did not proceed, that were finalised by consent and that were finalised by judicial determination. However, there appears to be some inaccuracy in the finalisation codes on the Court database. Court staff may have entered incorrect codes. For example, ‘CJ’ may have been used to indicate ‘consent judgment’ rather than ‘court judgment.’ A random audit of twenty matters found that three infant’s compromises were incorrectly recorded as ‘CJ’ (Court Judgment) rather than ‘FCO’ (Final Consent Orders). Other potential mistakes are that ‘FCO’ (final consent order) and ‘FO’ (final orders from a hearing) may have been confused. There is no practical way to test the accuracy of the entries onto the database without reviewing the original court files, which is impractical. This data should be read with some caution.

[11] Rundle, How Court-Connection and Lawyers’ Perspectives Have Shaped Court-Connected Mediation Practice above n 1, ch 4.

[12] See, Law Society of Tasmania website, (as at 19th April 2007) <www.taslawsociety.as

n.au>.

[13] This figure is based upon a list provided by the then Registrar of the Supreme Court. However, the list was compiled from his recollections (with reference to a list of lawyer members of the Law Society of Tasmania at the time) and there is some possibility of error.

[14] See Appendix A for the schedule of interview questions.

[15] Only one out of the 42 interviewees expressed a negative attitude towards the Supreme Court of Tasmania’s mediation programme. All other interviewees viewed the programme positively, even if they identified areas in which it could be improved.

[16] Hobart Family Law Pathways Group, ‘Identifying Family Lawyer’s Perceptions of Primary Dispute Resolution (PDR); What Factors Precipitate or Inhibit Referrals to PDR Services in Community Organisations?’ (2004); Carol Bartlett, ‘Mediation in the Spring Offensive 1992’ (1993) 67(4) Law Institute Journal 232; Rachael Field, ‘The Use of Litigation and Mediation for the Resolution of Custody and Access Disputes: A Survey of Queensland Family Law Solicitors’ (1996) 7 Alternative Dispute Resolution Journal 5; Nadja M Spegel, ‘Queensland Lawyer Attitudes Towards Mediation - Implications for Training and Education’ (1998) National Law Review 1; Archie Zariski, ‘Lawyers and Dispute Resolution : What Do They Think and Know (And Think They Know)? - Finding Out Through Survey Research’ (1997) 4(2) Murdoch University Electronic Journal of Law 1 <http://www.murdoch.edu.au/elaw/issues/v4n2/zaris422.html> .

[17] Kay Saville-Smith and Ruth Fraser, Alternative Dispute Resolution: General Civil Cases (Ministry of Justice, 2004) 44; Robert G Hann and Carl Baar with Lee Axon, Susan Binnie and Fred Zemans, ‘Evaluation of the Ontario Mandatory Mediation Programme (Rule 24.1): Final Report - The First 23 Months’ (Report, Robert Hann and Associates Limited / Ontario Ministry of the Attorney General, 2001); James S Kakalik et al ‘Just, Speedy, and Inexpensive? An Evaluation of Judicial Case Management Under the Civil Justice Reform Act’ (MR-800-ICJ, RAND, 1996).

[18] Not all legal practitioners were asked all of the questions in the interview schedule. There were a number of reasons for these omissions, including semi-structure of the interviews, time constraints and the first three interviews being “pilot” interviews, following which the interview schedule was finalised. See Rundle, How Court-Connection and Lawyers’ Perspectives Have Shaped Court-Connected Mediation Practice, above n 1, ch 3 [4.1.2].

[19] 23 said ‘always’, 9 said ‘usually’ and 5 said ‘sometimes’.

[20] Between June 1999 and June 2006 between 63% and 78% of torts matters that were finalised by consent did so without court-connected mediation. Between 70% and 97% of judicially determined torts matters were finalised without mediation having occurred. This was despite most court-connected mediation being held in torts matters. Rundle, How Court-Connection and Lawyers’ Perspectives Have Shaped Mediation Practice, above n 1, ch 4 [3.3] and [6.1].

[21] Not all legal practitioners were asked all of the questions in the interview schedule. There were a number of reasons for these omissions. See above n 18.

[22] Thirteen lawyers (of 36 =36%) mentioned this in answer to the question about the difference that mediation has made to the way that they practised. Lawyers 2, 3, 5, 7, 11, 15, 18, 22, 27, 29, 32, 38 and 41.

[23] Bridget Sordo, ‘The Lawyer’s Role in Mediation’ (1996) 7 Australian Dispute Resolution Journal 20, 22-23; Law Council of Australia, Guidelines for Lawyers in Mediations (March 2007) <http://www.nswbar.asn.au/docs/professional/adr/documents/LAWCOUNCILGUIDELINESFORLAWYERSINMEDIATIONS.pdf> Law Society of New South Wales, Mediation and Evaluation Information Kit (Revised) (2007) <www.lawsociety.com.au>; Chiara-Marisa Caputo, ‘Lawyers’ Participation in Mediation’ (2007) 18 Australasian Dispute Resolution Journal 84.

[24] Roselle L Wissler, ‘Representation in Mediation: What We Know from Empirical Research’ (2010) 37 Fordham Urban Law Journal 419, 431.

[25] Ibid, 432.

[26] Ibid, 433 citing various research, as well as her own.

[27] Bobbi McAdoo, ‘A Report to the Minnesota Supreme Court: The Impact of Rule 114 on Civil Litigation Practice in Minnesota’ (2002) 25(3) Hamline Law Review 401, 432.

[28] Julie Macfarlane, ‘Culture Change? A Tale of Two Cities and Mandatory Court-Connected Mediation’ (2002) University of Missouri Journal of Dispute Resolution 244, 262.

[29] Ibid.

[30] Joel Gerschman, ‘Pilot Study Examines Lawyer’s Roles in VCAT Mediations’ (2003) 7 VCAT Mediation Newsletter 7, 9.

[31] Dame Hazel Genn at al, ‘Twisting arms: court referred and court linked mediation under judicial pressure’ (Ministry of Justice Research Series, Faculty of Laws, University College London, University of Nottingham Business School, 2007), 124.

[32] Keith Schildt, James J Alfini and Patricia Johnson, ‘Major Civil Case Mediation Pilot Program: 17th Judicial Circuit of Illinois’ (Report, College of Law, Northern Illinois University, 1994), 32.

[33] Julie Macfarlane and Michaela Keet, ‘Civil Justice Reform and Mandatory Civil Mediation in Saskatchewan: Lessons from a Maturing Program’ (2005) 42 (3) Alberta Law Review 677, 689.

[34] Craig A McEwen, Lynn Mather and Richard J Maiman, ‘Lawyers, Mediation, and the Management of Divorce Practice’ (1994) 28(1) Law & Society Review 149, 159.

[35] Timothy Hedeen, ‘Remodelling the Multi-door Courthouse to “Fit the Forum to the Folks”: How Screening and Preparation will Enhance ADR’ (2011-2012) 95 Marquette Law Review 941, 951.

[36] Ibid, 953.

[37] John W Cooley, Mediation Advocacy (Nita Publications, 2nd ed, 2002) ch 3; Bruce A Blitman, ‘Ten Ingredients for a Successful Mediation’ (2003) 18(6) Commercial Law Bulletin 8.

[38] Not all legal practitioners were asked all of the questions in the interview schedule. There were a number of reasons for these omissions. See comments above, in n 18.

[39] Note that not all combinations are reported in the Table.

[40] This is consistent with the preparation for mediation recommended in literature. See for example Richard G Spier, ‘Mediation Miscues: The 10 Biggest Mistakes Lawyers Make in Mediation’ (1999) 59 The Oregon State Bar Bulletin 35, 36; Leonard L Riskin, ‘Mediation and Lawyers’ (1982) 43 Ohio State Law Journal 29, 37.

[41] Lawyer 13.

[42] Lawyer 21.

[43] This approach to mediation advocacy is consistent with the approach recommended in some literature promoting ‘mediation advocacy’. See, eg, Beth Byster Corvino and Irving B Levinson, ‘101 Ways to Wage Effective Mediation of Corporate Disputes’ (1999) Corporate Legal Times 86.

[44] Roger Fisher, William Ury and Bruce Patton, Getting to Yes: Negotiating Agreement Without Giving In (Penguin Books, 2nd ed, 1991).

[45] Pat Cavanagh, ‘Doing it Better - Behaviour Indicia of Superior Negotiators’ (2002) 4(10) ADR Bulletin 141.

[46] Carrie Menkel-Meadow, ‘Toward another View of Legal Negotiation: The Structure of Problem Solving’ (1984) 31 UCLA Law Review 754, 837.

[47] Lawyer 32.

[48] There are no legislative, policy or other guidelines limiting the style of mediation within the programme. Considerable variability between mediators was demonstrated by the interviews with both mediators and lawyers. See Rundle, ‘How Court-Connection and Lawyers’ Perspectives Have Shaped Mediation Practice’ above n 1, ch 4 [5].

[49] A useful observation for future question design.

[50] Lawyer 7.

[51] Lawyer 16.

[52] Lawyer 13.

[53] Lawyer 41.

[54] Leonard Riskin, ‘Understanding Mediator Orientations, Strategies and Techniques: A Grid for the Perplexed’ (1996) 1 Harvard Negotiation Law Review 1.

[55] Susan L Brooks and Robert G Madden, ‘Relationship-Centered Lawyering: Social Science Theory for Transforming Legal Practice’ (2009) 78(1) Revista Juridica UPR 23.

[56] Craig A McEwen, Nancy H Rogers and Richard J Maiman, ‘Bring in the Lawyers: Challenging the Dominant Approaches to Ensuring Fairness in Divorce Mediation’ (1995) 79 Minnesota Law Review 1317, 1358.

[57] Tania Sourdin, ‘Mediation in the Supreme and County Courts of Victoria’ (Report, Victorian Department of Justice, 2009), 54.

[58] See Macfarlane, above n 28.

[59] Marie Delaney and Ted Wright, Plaintiff’s Satisfaction with Dispute Resolution Processes: Trial, Arbitration, Pre-Trial Conference and Mediation (Justice Research Centre, 1997) 66; Roselle Wissler, ‘Court-Connected Mediation in General Civil Cases: What We Know from Empirical Research’ (2002) 17 Ohio State Journal of Dispute Resolution 641, 687; Bobbi McAdoo and Nancy Welsh, ‘Look Before You Leap and Keep On Looking: Lessons from the Institutionalization of Court-Connected Mediation’ (2004-2005) 5 Nevada Law Journal 399, 424. See further, Rundle, How Court-Connection and Lawyers’ Perspectives Have Shaped Mediation Practice, above n 1, ch 2 [4.2.2].

[60] Macfarlane and Keet (2005), above n 33, 693.

[61] Ibid, 693.

[62] Ibid, 692.

[63] Not all legal practitioners were asked all of the questions in the interview schedule. There were a number of reasons for these omissions. See, above n 18.

[64] Note that not all combinations are reported in the Table.

[65] Law Society of New South Wales, above n 23; Mary Walker, ‘Guidelines for Lawyers in Mediations’ (2007) 9(8) ADR Bulletin 150; Laurence Boulle, Mediation: Skills and Techniques (Butterworths Skills Series, Lexis Nexis, 2001) 309; Ann Beckingham and Jim Cyngler, ‘The Involvement of Lawyers, Accountants and Other Professionals When Attending Their Clients’ Mediations’ (Paper presented at the 4th National Mediation Conference, Melbourne, April 1998); Cooley, above n 37, ch 4; Stephen Marsh, ‘A Mediation Checklist’ (2002) 17(6) Commercial Law Bulletin 8; Spier, above n 40, 36.

[66] Lawyer 5.

[67] Donna Cooper and Mieke Brandon, ‘How Can Family Lawyers Effectively Represent their Clients in Mediation and Conciliation Processes?’ (2007) 21 Australian Journal of Family Law 1, 5.

[68] Lawyer 7.

[69] Walker, above n 65; John H Wade, ‘Representing Clients Effectively in Negotiation, Conciliation and Mediation in Family Property Disputes’ (2004) 17 Bond Dispute Resolution News 7, 10.

[70] Law Society of New South Wales, above n 23, [1.9].

[71] Laurence Boulle, Mediation: Principles, Process, Practice (LexisNexis Butterworths 3rd ed, 2011); Nadja Alexander, ‘The Mediation Metamodel: Understanding Practice’ (2008) 26(1) Conflict Resolution Quarterly 97.

[72] Cooper and Brandon, above n 67, 12.

[73] Ibid, 30-33.

[74] Law Society of New South Wales, above n 23, [1.5].

[75] Ibid, [1.1]; Sordo, above n 23, 22; Blitman, above n 37.

[76] This description was common for both mediators and lawyers. Two of the four mediators who were interviewed also described another style of mediation, adopted in a smaller number of matters, and involving more non-legal interest-based discussions.

[77] See Rundle, ‘Lawyers’ Perspectives on “What is Court-Connected Mediation For?”’, above n 6.

[78] Lawyer 24.

[79] Lawyer 30.

[80] Lawyer 42.

[81] Lawyers 5, 24 and 34.

[82] Lawyer 34.

[83] The study demonstrated that this narrowing was influenced by practitioner’s perceptions of the purpose of court-connected mediation. Rundle, ‘Lawyers’ Perspectives on “What is Court-Connected Mediation For?”, above n 6.

[84] See Olivia Rundle, ‘Barking Dogs: Lawyer Attitudes Towards Direct Disputant Participation in Court-Connected Mediation of General Civil Cases’ [2008] QUTLawJJl 4; (2008) 8(1) Queensland University of Technology Law and Justice Journal 77, where the tendency of the same participants to see the lawyer’s role as one of spokesperson, for fear of losing control, was discussed.

[85] See above n 69.

[86] Law Council of Australia, above n 23; Law Society of New South Wales, above n 23; Family Law Council, Best Practice Guidelines for Lawyers Doing Family Law Work (Family Law Council 2nd ed, 2010), Part 2, <http://www.familylawsection.org.au/resource/BestPracticeGuidelinesv8FINAL.pdf> .

[87] Samantha Hardy and Olivia Rundle, Mediation for Lawyers (CCH, 2010); Peter Condliffe, The Mediation Handbook: A Guide for Lawyers (Law Institute of Victoria 2nd ed, 2012).

[88] See, eg, Bobette Wolski, ‘The Truth About Honesty and Candour in Mediation: What the Tribunal Left Unsaid in Mullins’ Case’ [2012] MelbULawRw 18; (2012) 36 Melbourne University Law Review 706; Bryan Clark, Lawyers and Mediation (Springer, 2012); Donna Cooper and Mieke Brandon, ‘Lawyers’ Role Options in Family Dispute Resolution’ (2010) 22 Australasian Journal of Dispute Resolution 198.

[89] See, eg, Robin Tapper and Robyn Carroll, ‘Ethical Practice in Negotiation and Mediation’ CPD notes available at <http://lawcpd.com.au/sites/default/files/uploads/readin

gs/RT13.pdf>; Toby Boys, ‘How to Prepare for Mediation’ Lawyers Weekly (online) 31 August 2012, <http://www.lawyersweekly.com.au/the-new-lawyer/comment-debate/how-to-prepare-for-mediation> Robert Angyal, ‘The Ethical Limits of Advocacy in Mediation’ (Paper delivered to Bar Practice Course 1/2011, Friday 20 May 2011) <http://www.nswbar.asn.au/docs/professional/adr/documents/angyal_20052011.pdf> Ian Nosworthy, Preparing for Mediation Television Education Network: WebCPD for lawyers and accountants (November 2007) <http://www.tved.net.au/index.cfml> .

[90] Hardy and Rundle, above n 87. See also Law Council of Australia, above n 23.

[91] Carrie Menkel-Meadow, ‘The Trouble with the Adversary System in a Postmodern, Multicultural World’ (1996) 38 William and Mary Law Review 5.

[∗] BCom-LLB(Hons) (Tas); LLM (Mich) LLD (Tas), CPA.; Professor, Faculty of Law, University of Tasmania. I extend thanks to an anonymous reviewer for comments on this paper. All errors remain my responsibility.

[92] Morice v Bishop of Durham [1804] EngR 177; (1804) 32 ER 656, 658 (Sir William Grant MR).

[93] See, eg, Wroe v Seed [1863] EngR 824; (1863) 66 ER 773, 774–5 (Stuart VC).

[94] CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53; (2005) 224 CLR 98,112 [25] (Gleeson CJ, McHugh, Gummow, Callinan and Heydon JJ).

[95] See, eg, Gartside v Inland Revenue Commissioners [1967] UKHL 6; [1968] AC 553, 607 (Lord Reid); Walter v Handberg [2003] VSCA 122, [15] (Chernov JA).

[96] Reef & Rainforest Travel Pty Ltd v Commissioner of Stamp Duties [2001] QCA 249; [2002] 1 Qd R 683, [11] (McPherson JA).

[97] See, eg, Australian Securities and Investments Commission v Carey (No 6) [2006] FCA 814; (2006) 153 FCR 509; Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366.

[98] Compare, eg, Costa & Duppe Properties Pty Ltd v Duppe [1986] VicRp 9; [1986] VR 90 with Re S & D International Pty Ltd (No 4) [2010] VSC 388; (2010) 79 ACSR 595. See also the discussion in D K L Raphael, ‘Caveats and Unit Trusts’ (2007) 81 Australian Law Journal 881.

[99] This in turn explains, for instance, why an equitable claim must yield to a bona fide purchaser for value of the property to which the claim is made: Foskett v McKeown [2000] UKHL 29; [2001] 1 AC 102, 130–2 (Lord Millett).

[100] This explains, say, why courts will not impose a remedial constructive trust if ‘there is an appropriate equitable remedy which falls short of the imposition of a trust’: Giumelli v Giumelli (1999) 196 CLR 101, 113 (Gleeson CJ, McHugh, Gummow and Callinan JJ).

[101] See Austin Scott, William Fratcher and Mark Ascher, Scott and Ascher on Trusts (Wolters Kluwer, 5th ed, 2007) Vol 3, 803–17 (in the context of how it translates into the beneficiaries’ ‘interests’).

[102] In this context, whether the same principles apply to executors as to trustees: see Gino Dal Pont and Ken Mackie, Law of Succession (LexisNexis Butterworths, Australia, 2013) 395–6.

[103] [1920] AC 581, 626–7.

[104] See O’Rourke v Darbishire [1920] AC 581, 619–20.

[105] See Schreuder v Murray (No 2) [2009] WASCA 145; (2009) 41 WAR 169.

[106] [1965] Ch 918.

[107] (1992) 29 NSWLR 405.

[108] On this debate see generally Mark Thomas, ‘Information as Property: Humanism or Economic Rationalism in Millennium?’ [1998] QUTLawJl 11; (1998) 14 Queensland University of Technology Law Journal 203.

[109] [1965] Ch 918, 938.

[110] [1970] UKHL 1; [1971] AC 424 (where the House of Lords applied to discretionary trusts the same test for certainty of object as applied previously only to mere powers). Indeed, it has been suggested that the discretionary approach espoused by the Privy Council in Schmidt v Rosewood Trust Ltd [2003] UKPC 26; [2003] 2 AC 709 (a discussion of which forms the next part of the article) is a logical progression from McPhail v Doulton: Tsun Hang Tey, ‘Trustee’s Duty of Disclosure’ (2012) 24 Singapore Academy of Law Journal 191, 206–8.

[111] Cf Breen v Williams (1996) 186 CLR 71, 89 (Dawson and Toohey JJ).

[112] (1992) 29 NSWLR 405, 432.

[113] Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405, 432.

[114] McPhail v Doulton [1970] UKHL 1; [1971] AC 424.

[115] Commissioner of Stamp Duties (Qld) v Livingston [1965] AC 694, 717 (Viscount Radcliffe); Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 170 CLR 306, 313–14 (Full Court).

[116] Morice v Bishop of Durham [1804] EngR 177; (1804) 32 ER 656, 658.

[117] [2003] UKPC 26; [2003] 2 AC 709.

[118] [1920] AC 581, 626–7.

[119] Schmidt v Rosewood Trust Ltd [2003] UKPC 26; [2003] 2 AC 709, [50].

[120] Schmidt v Rosewood Trust Ltd [2003] UKPC 26; [2003] 2 AC 709, [51].

[121]See, eg, Randall v Lubrano (Unreported, Supreme Court of New South Wales, Holland J, 31 October 1975); Spellson v George (1987) 11 NSWLR 300, 315–17 (Powell J); Murphy v Murphy [1999] 1 WLR 282, 290 (Neuberger J).

[122] See McPhail v Doulton [1970] UKHL 1; [1971] AC 424, 448–9 (Lord Wilberforce).

[123] Schmidt v Rosewood Trust Ltd [2003] UKPC 26; [2003] 2 AC 709, [67] (emphasis added).

[124] To exercise a discretion judicially is inconsistent with its exercise in an arbitrary or capricious sense, and translates into a positive obligation to exercise it ‘on fixed principles’, ‘according to rules of reason and justice, not according to private opinion ... benevolence ... or sympathy’: Williams v Lewer [1974] 2 NSWLR 91, 95 (Rath J).

[125] Although a New South Wales judge has expressed the view, extrajudicially, ‘explicit recognition that access to information is granted as an exercise of the inherent jurisdiction over trusts, and involves some discretionary judgments, involves [no] greater uncertainty than was recognised in previous decisions’ (J C Campbell, ‘Access by Trust Beneficiaries to Trustees’ Documents, Information and Reasons’ (2009) 3 Journal of Equity 97 at 146–7), the case law and arguments post-Schmidt suggest that this is not a widely held view.

[126] [2007] NSWSC 191; (2007) 68 NSWLR 595.

[127] Avanes v Marshall [2007] NSWSC 191; (2007) 68 NSWLR 595, [14].

[128] Ibid [15].

[129] [2004] 1 NZLR 841.

[130] [2011] NSWSC 148, [27] (albeit ‘[a]bsent clear appellate guidance’).

[131] (1992) 29 NSWLR 405.

[132] See Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405, 434–5 (Mahoney JA), 442–5 (Sheller JA). Contra, 417–22 (Kirby P, dissenting on the confidentiality point).

[133] Schmidt v Rosewood Trust Ltd [2003] UKPC 26; [2003] 2 AC 709, [52] and [53].

[134] Accordingly, it is difficult to concur with the suggestion that Hartigan is not inconsistent with Schmidt, in the sense that the disclosure of information is subject to the court’s inherent jurisdiction (see Tsun Hang Tey, ‘Trustee’s Duty of Disclosure’ (2012) 24 Singapore Academy of Law Journal 191, 200).

[135] [2007] NSWSC 1068; (2007) 72 NSWLR 605.

[136] McDonald v Ellis [2007] NSWSC 1068; (2007) 72 NSWLR 605, [46].

[137] Ibid [48]. Newnes J in Murray v Screuder (2009) 1 ASTLR 340, [57], in line with the remarks of Bryson AJ in McDonald v Ellis, refused to apply what was said in Schmidt to a non-discretionary trust. Though Newnes J’s judgment was affirmed on appeal (Schreuder v Murray (No 2) [2009] WASCA 145; (2009) 41 WAR 169), the Western Australian Court of Appeal found it unnecessary to decide this point. See also G Dawson, ‘A Fork in the Road for Access to Trust Documents’ (2009) 3 Journal of Equity 1 (who maintains that the reasoning in McDonald v Ellis ‘is least likely to cause damage to equitable precedent in New South Wales while at the same time providing trustees and beneficiaries of fixed trusts with greater certainty as to their rights and obligations’: at 13).

[138] See, eg, Randall v Lubrano (Unreported, Supreme Court of New South Wales, Holland J, 31 October 1975); Spellson v George (1987) 11 NSWLR 300, 315–17 (Powell J).

[139] Omitted is a discussion of information the confidentiality of which derives other than from the direction of the settlor, such as confidential business information where the trust operates a business. In this event, the information is ordinarily within the beneficiaries’ domain, although its confidentiality vis-à-vis third parties may dictate restrictions or controls on its disclosure: see, for example, Rouse v IOOF Australia Trustees Ltd [1999] SASC 181; (1999) 73 SASR 484, 499–500 (Doyle CJ).

[140] (1992) 29 NSWLR 405.

[141] The creator was not the settlor, but the trust was created at his instigation.

[142] Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405, 446.

[143] Ibid 436. Immediately before this observation, his Honour stated that ‘[s]pecial cases apart, it is proper that [the settlor’s] wishes and his privacy be respected’ at 436. However, no indication was supplied as to what ‘special cases’ might involve.

[144] [1965] Ch 918, 935–6.

[145] A point made by Briggs J in Breakspear v Ackland [2009] Ch 32, [40] and [41].

[146] Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405, 419.

[147] Ibid 420. See also Foreman v Kingstone [2004] 1 NZLR 841, [95] (Potter J) (who surmised that ‘the denial of information may be the cause of friction or exacerbate friction, because lack of relevant and accurate information will frequently lead to conjecture, suspicion and resentment by those denied’).

[148] [2009] Ch 32, [58].

[149] Breakspear v Ackland [2009] Ch 32, [58].

[150] Ibid, [56]. On the facts his Lordship concluded that, once the trustees approached the court for sanction of a proposed scheme of distribution, that the contents of the wish letter would be relevant to the court’s appraisal of the scheme and, ‘in that special context, the risk of family division occasioned by disclosure would then clearly be outweighed by the requirement to give the claimants as potential beneficiaries a proper opportunity to address the court on the question of sanction, in full knowledge of the content of the materials to which the trustees will by then have paid careful regard’, [98].

[151] Breakspear v Ackland [2009] Ch 32, [62], [63] (emphasis added).

[152] See Gino Dal Pont, Equity and Trusts in Australia (Lawbook Co, 5th ed, 2011) 201–5.

[153] Cf. Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405, 447 (Sheller JA) (who countenanced the possibility that ‘some overriding public interest’ could be a countervailing circumstance that calls for the disclosure of a document given to the trustees in confidence).

[154] In Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405, 419 Kirby P viewed a non-mandatory confidential memorandum as a trust document. Mahoney JA (at 433) considered it possible to envisage documents communicated to a trustee that are property of the trust (and therefore trust documents) but are nonetheless confidential. Sheller JA (at 445) did not consider that such a document, leaving aside the issue of confidentiality, would necessarily fall outside the class of documents to which the beneficiaries would be entitled.

[155] Jessica Palmer, ‘Theories of the Trust and What They Might Mean for Beneficiary Rights to Information’ [2010] New Zealand Law Review 54, 560. Also, in falling outside the trust document, wish letters are, as a result of the High Court’s decision in Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, arguably not admissible as a vehicle to interpret its terms. But the judgments in Byrnes say nothing explicit about beneficiaries’ access to extrinsic documents such as wish letters, or as to the legitimacy or otherwise of trustees being informed by extrinsic documents, as part of their overall discretion, in making appointments of trust income or corpus.

[156] Karger v Paul [1984] VicRp 13; [1984] VR 161.

[157] This is exemplified by English courts’ refusal to countenance the remedial constructive trust grounded in unconscionable conduct, and instead resort to presumptions as to common intention: see, eg, Stack v Dowden [2007] UKHL 17; [2007] 2 AC 432.

[158] See, eg, Tsun Hang Tey, ‘Trustee’s Duty of Disclosure’ (2012) 24 Singapore Academy of Law Journal 191, 222.

[159] See, eg, Thomas Kaldor, ‘Competing Approaches to Beneficiary Access to Trust Information: Perhaps not so much of “a fork in the road”’ (2012) 86 Australian Law Journal 775.

[160] See Jessica Palmer, ‘Theories of the Trust and What They Might Mean for Beneficiary Rights to Information’ [2010] New Zealand Law Review 541, 563–4. The Queensland Law Reform Commission has initiated this very inquiry in the course of its current review of the Trusts Act 1973 (Qld): see Queensland Law Reform Commission, A Review of the Trusts Act 1973 (Qld), Discussion Paper, WP No 70 (2012) 215–35. Existing provision in the trustee legislation in South Australia as to trustee record-keeping (see Trustee Act 1936 (SA) s 84B) and in Tasmania entitling ‘any person beneficially interested in any property’ to apply in writing for trust accounts (see Trustee Act 1898 (Tas) s 28(1)) do not comprehensively address the issues raised in this article.