Introduction

Many of our readers will recall our previous article regarding lost family trust deeds, and the problems this can cause.

A recent Victorian Court of Appeal decision has provided further legal guidance on this issue.

The original decision - Mantovani v Vanta Pty Ltd (No 2) [2021] VSC 771

The original decision was made by the Victorian Supreme Court in July 2021. The facts were as follows:  

• Mrs Mantovani had four adult children.
• In 1976 a family trust was created and Mrs Mantovani transferred several properties to the trust.  
• Over time, distributions totalling more than $120,000.00 had been paid from the trust to her children.
• After Mrs Mantovani died, the trust was controlled by two of children. A dispute arose between them and the other child, and it was it was discovered that the original trust deed had been lost. A copy could not be found.  
• The other child argued that the family trust failed as the contents of the trust deed were not known.  
• Despite the controllers of the trust presenting to the Court a copy of the schedule to the trust deed and trust financial statements as evidence of the contents of the trust deed, the Court held that the trust failed because the contents of the original trust deed could not be ascertained.
• All the property held in the trust therefore formed part of Mrs Mantovani’s deceased estate, which benefited the third child.  
• Further, the Trustee was ordered to pay the deceased estate an amount equal to all distributions made from the trust to beneficiaries during the previous six years.  

On appeal – Vanta Pty Ltd v Mantovani [2023] VSCA 53

In March 2023, the Court of Appeal overturned the original decision. The Court held, in summary that:

• The copy of the trust deed schedule, and trust financial statements, established ‘on the balance of probabilities’ the essential terms of trust; and
• The trust property therefore continued to be owned by the trust, and did not form part of Mrs Mantovani’s deceased estate  

This was ultimately a good result for the trustee. But it was no doubt a very costly and stressful exercise for all parties involved. The proceeding could have been avoided if the original trust deed had been properly stored.

Take-away Points

• Always know the location of the original, signed trust deed for your family trust. Your solicitor or accountant will usually store such documents on your behalf, free of charge.
• If you are an accountant, ensure that you sight the original or a certified copy of the original trust deed (and any later deeds of amendment) before advising on distributions from the trust, or other trust transactions. Do not assume the terms of the original trust deed are ‘standard’.
• If you have lost the original trust deed, seek advice from an experienced lawyer as soon as possible, regarding your options. Don’t wait until you need to show the trust deed to a bank or authority.

How Sharrock Pitman Legal can assist?

When a family trust deed is lost, this can lead to disputes with beneficiaries and unnecessary legal and other costs.  

If you would like further information on your legal options, please contact our specialist Wills and Estates team on 1300 205 506.

‍

‍The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.‍