Administrative appeals: duty of administrative body to give reasons

In the Matter of the C provides an important reminder to trustees that it may be, in certain cases, justifiable to withhold information regarding a young beneficiary's entitlement under a trust from that beneficiary, even if they are over the age of capacity.

The trustee brought a Beddoe application seeking approval to settle a claim brought against a company wholly owned by the trust. In such cases, the views of all adult beneficiaries are sought to help the Court consider whether to bless the trustee's decision or not.

In this case two of the three adult beneficiaries were convened, but the third ("K"), who was 19 years old and was not aware of his significant beneficial entitlement under the trust, was not. The trustee decided that K should not learn of his entitlement under the trust until he was older so as not to distract him from his studies or from the importance of future employment. The court was in a predicament. On the one hand, an individual attains majority at the age of 18 and any adult beneficiary is entitled to, within the limits of the law, understand the nature of their beneficial entitlement under the trust and express their view on a Beddoe application. Equally, the Court expressed sympathy with the trustee's contention that a young beneficiary might pursue a "life of party-going and riotous living" if they knew they were beneficially entitled to significant sums of money.

Ultimately, the court approved the trustee's paternalistic approach and the proposed settlement without convening K. Whether the Court might adopt a similar approach in future cases will vary from case to case and depend, in large part, on the individuals involved. The fundamental issue which will govern the Court's approach is whether the withholding of information is ultimately in the best interests of the beneficiary or beneficiaries in question.