Trustees’ duty to provide information to beneficiaries

It is well known that trustees are bound to keep accounts, provide information to beneficiaries, and permit beneficiaries to inspect documents. Traditionally, the underlying principle was said to be that the documents belong to the beneficiaries rather than the trustees. Of course, even at a relatively early stage it was realised that this could put trustees in a somewhat invidious position, as trustees are not mere administrators, bound unthinkingly to follow mechanistic rules. Trustees are expected to exercise judgement and to hold a balance between competing and conflicting interests. Not surprisingly, trustees could feel that they might be placed in an intolerable position, apparently being bound to provide ammunition to those who might be minded to sue them. The difficulty, and the disincentive to those who might be prepared to act as trustees, was recognised over 150 years ago by Lord Truro LC in the rather charmingly named case Re Beloved Wilkes’s Charity (1851) 3 Mac. & G 440. He laid down the general principle that if trustees gave reasons for their decisions, the court could inquire into the sufficiency of those reasons, but if they did not, the court would not oblige them to do so. He recommended that in many cases it would be enough for them to say that they had met and considered and come to a conclusion. In Re Londonderry 1965 CH 918 at p 936G, Salmon LJ highlighted the problems of requiring trustees to give reasons, for exercise of their discretions, in the starkest terms: