Rinehart v Rinehart

1. [1]

   GLEESON JA: I agree with Leeming JA.

2. [2]

   LEEMING JA: Ms Bianca Rinehart appeals pursuant to leave granted late last year by this Court from certain orders made in the Equity Division concerning her access to documents in the possession of her mother Ms Georgina Rinehart, known as Gina: Rinehart v Rinehart [2021] NSWCA 233 (Macfarlan and McCallum JJA). Leave to appeal from other parts of those orders was refused. I shall follow the approach adopted in most of the five appellate decisions arising directly or indirectly out of the orders to “deliver up to the second plaintiff [Bianca] within 28 days all documents of the trust in her possession” made in the previous six years and refer to Bianca and Gina by their given names.

3. [3]

   What has already been said indicates that this litigation, between parties who possess considerable wealth and large appetites for litigation, has the capacity to expand beyond the limits mandated by s 56 of the Civil Procedure Act 2005 (NSW). Gina is under a duty to assist the court in its giving effect to the overriding purpose of the just, quick and cheap resolution of the real issues in the proceedings. Bianca is under the same duty. The highly skilled lawyers retained by mother and daughter are forbidden from causing their clients to breach those duties. I do not suggest that any breach has occurred. However, sight of that overriding purpose may be lost when litigation explodes in interlocutory appeal after interlocutory appeal. It is to be borne steadily in mind that Gina was replaced as trustee by Bianca many years ago, that the prima facie position is that the outgoing trustee must deliver to the new trustee all trust documents, and that much of the litigation over the last six years has been merely the working out of that obligation. The “real issues” in the proceedings commenced in 2011 by Bianca, insofar as the removal of Gina as trustee was their object, were long ago resolved. It is also to be borne in mind that the High Court said, referring to the overriding purpose in the Civil Procedure Act, that:

4. [4]

   This appeal, concerning whether particular documents should be disclosed to the new trustee, it having been determined many years ago that the former trustee should retire, well fits the description of an unduly technical and costly dispute about non-essential issues. So too does the unfortunate dispute recorded by the primary judge at the outset of her reasons about the order in which motions should be heard, which doubtless contributed to her Honour’s opening words: “This is yet another unedifying interlocutory application in the ongoing litigious saga between members of the Rinehart family”.

Essential background

1. [5]

   “Simplicity is a neglected legal virtue, perhaps because achieving it can be very hard”. Those observations, made in a note in “Keeping Negligence Simple” (2022) 138 LQR 175 criticising aspects of the elaborate reasoning in Meadows v Khan [2021] UKSC 21; [2021] 3 WLR 147 on a straightforward negligence appeal, are equally apposite here. It is important not to lose sight of the simplicity of the basic issue dividing the former and current trustee by the complexity of the record.

2. [6]

   The details of the lengthy procedural background may largely be deferred, although I shall return to aspects of them in due course to explain how errors have come about. All that matters is the following:

   1. (1)

      Gina was, until 2015, the trustee of the Hope Margaret Hancock Trust. Shares in the second respondent, Hope Prospecting Pty Ltd (HPPL), are one of the assets of that trust. Gina was at all material times a director of HPPL.

   2. (2)

      In 2011, Bianca and two of her siblings sued to remove Gina as trustee of the Hope Margaret Hancock Trust. “[T]he plaintiffs primarily claimed removal and replacement of Mrs Rinehart as trustee of the Trust – essentially on the ground that, in connection with giving consideration to the extension of its vesting date in September 2011, she so misconducted herself as to demonstrate unfitness to retain the office of trustee”: Hancock v Rinehart [2015] NSWSC 646; 106 ACSR 207 at [38]. Such an application is not lightly acceded to. The authorities bearing upon this aspect of the court’s supervisory jurisdiction over trustees were recently reviewed in St John’s Trust Company (PVT) Ltd v Medlands (PTC) Ltd [2021] CA (Bda) 20 Civ at [47]-[58] (s 31 of the Bermudan Trustee Act 1925 is cognate with s 77 of the Trustees Act 1962 (WA) and s 70 of the Trustee Act 1925 (NSW)). They were also reviewed in Welker v Rinehart (No 10) [2012] NSWSC 1330 at [7]-[10], a decision in the same proceeding as that from which the present appeal has been brought, the name of which indicates the quantity of applications which were made in only the first year of this litigation.

   3. (3)

      It was recorded in 2015 that Gina “resigned in the face of proceedings to remove her for misconduct without having provided any account or explanation for the matters complained of against her resigning before the application to remove her was determined by a court”: Hancock v Rinehart at [373].

   4. (4)

      Order 1 made on 28 May 2015 appointed Bianca to the office of trustee of the Hope Margaret Hancock Trust. Order 2 made on the same date, made pursuant to s 78 of the Trustees Act 1962 (WA), was that “the assets and property of the Trust vest in the said Bianca Hope Rinehart as such trustee”. (Jurisdiction to make that order was conferred, if not otherwise available, by s 4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (WA).)

   5. (5)

      Order 3 made on the same date required Gina to produce “all documents of the Trust in her possession custody or power” within 28 days. Order 4 granted liberty to Gina to be relieved from order 3 in respect of any particular document or class of documents. These orders are ordinary consequences of the replacement of a trustee. In part they are unnecessary, because insofar as the former trustee owned documents in her capacity as trustee, the vesting order vests ownership of the documents in the new trustee.

   6. (6)

      The ensuing years have seen ongoing dispute as to the extent of the outgoing trustee’s obligation to deliver up all the trust documents to her successor. This appeal is the latest aspect of that dispute.

3. [7]

   An important milestone in the interlocutory disputation since 2015 was the application culminating in Hancock v Rinehart (Trust documents) [2018] NSWSC 1684. The Court, constituted by Brereton J (the same judge who had made the orders on 28 May 2015), required Gina to verify by affidavit that there had been compliance. Bianca and her brother had contended that Gina had “not made a genuine attempt to comply with the delivery up order, and indeed has deliberately not done so”; Gina maintained that “any deficiency [was] attributable to a good faith interpretation on her part of the order (in particular, as to what is a ‘document of the Trust’), or inadvertence”: at [2]. His Honour did not accede to Bianca’s submission, expressing his conclusion at [101]:

4. [8]

   Central to the issues raised on that application was the definition of the “documents of the Trust” which Gina was required to deliver up to her successor Bianca. Accordingly, his Honour considered at some length the ambit of that term. I shall return to those reasons. His Honour articulated four categories of documents, which framed the submissions before the primary judge and in this Court, and which are central to the outcome. His Honour said at [141]:

5. [9]

   In this Court, reference was made to “Category 3” and, especially, “Category 4” documents. It will be seen that none of the categories was framed in terms of ownership. This was criticised when Gina sought leave to appeal, in 2019. Her submission was summarised thus, in this Court’s reasons refusing leave to appeal in Rinehart v Rinehart [2019] NSWCA 54 at [21]:

6. [10]

   One reason for refusing leave was the difficulty of formulating and applying a property analysis in the abstract. This Court said at [29]-[30]:

7. [11]

   Ultimately, the order requiring verification of production was stayed by consent and the parties agreed upon a regime reflected in orders made on 5 December 2019 for production involving searches of an electronic database (an aspect of this is peripherally relevant to the abuse of process submissions).

8. [12]

   By notice of motion filed 18 March 2020, Bianca sought production of two classes of documents: the “Sceales Files” and the “Bankruptcy Transcripts”. The former were identified by reference to six folders provided under cover of a letter addressed to “The Trustee of the Hope Margaret Hancock Trust”. The latter were transcripts of examinations of Gina on six dates between 16 September 1999 and 20 February 2001.

9. [13]

   There is no issue as to the availability of the Sceales Files or the Bankruptcy Transcripts. Both are in Gina’s possession. There is evidence by Gina’s solicitor, who has reviewed the folders, that they are labelled “Agreement of June 1988” and described as “Copy Set”. The evidence describing them was summarised by the primary judge at [38]-[39] and need not be reproduced here. All that matters is that there is no suggestion that the volume or the location of the documents presents any practical difficulty to their being supplied by the former trustee to her successor.

10. [14]

    Gina opposed production. She contended that the documents were not “documents of the trust” and thus not prima facie to be provided to the incoming trustee. The submission was rejected, and there is no cross-appeal. However, as will be seen below, there is a lively issue as to the basis upon which her Honour reached the conclusion that the Sceales Files and the Bankruptcy Transcripts in the possession of Gina were documents of the trust.

11. [15]

    Gina next maintained that Bianca's application was an abuse of process, on the bases that she was seeking the documents to progress her personal claims in a pending arbitration and because she was taking inconsistent positions in her application and in that arbitration. The arbitration involves her and Gina (and many other parties, including all four beneficiaries of the trust), and has been called the “Martin Arbitration”. The primary judge was not satisfied that there was any abuse of process. Gina renews this submission in this Court by way of notice of contention.

12. [16]

    Gina also maintained by way of fallback that there should be no production until the conclusion of the Martin Arbitration. Gina submitted that there was a risk that any documents provided to Bianca in her capacity as incoming trustee might be used, wrongly, in the arbitration.

13. [17]

    By way of further fallback, Gina said that there should be dispensation from a requirement to produce the documents because doing so was likely to involve Gina breaching her duties as a director of HPPL.

Applicable principles

1. [18]

   I did not apprehend that there was anything contentious in the legal principles to be applied.

2. [19]

   First, insofar as Gina owned documents as trustee, title had vested in Bianca on 28 May 2015, and prima facie she was required to deliver to the new trustee what she had ceased to own at law. There is no reason why the ownership of pieces of paper (in this case, six lever arch folders and some transcripts of bankruptcy applications) held by the trustee as trust property is different from the ownership of any other chattels held by the trustee as trust property. The legal title of trust property prima facie passed from Gina to Bianca with the vesting order; that was the point of the order. Where some special procedure is required to vest legal title (such as the lodgement of a memorandum of transfer in the case of land, or the updating of a register of members in the case of shares in a company), s 85(3) and (4) of the Trustee Act 1962 (WA) (which are materially identical to s 78(3) and (4) of the Trustee Act 1925 (NSW)) make special provision (in effect, entitling the new trustee to cause his or her name to be registered as owner, but not then and there effecting a transfer of legal title). But the ownership of a chattel may be transferred by delivery or deed, and thus s 85(2) (which is materially identical to s 78(2) of the NSW statute) provides that “the vesting order has the same effect as if the trustee … had executed a conveyance … to the effect intended by the order”.

3. [20]

   That is to say, statute deems the outgoing trustee Gina to have executed a deed transferring the assets and property of the trust to Bianca.

4. [21]

   Secondly, Gina seemingly did not clearly distinguish between documents received and possessed by her in her capacity as trustee, and documents received and possessed by her in her personal capacity, including as director of HPPL. “[S]o far as appears, [Gina] did not maintain a rigorous separation between trust documents and documents held by her in other capacities, or for that matter HPPL documents; trust documents apparently reside in or with records of HPPL”: Hancock v Rinehart (Trust documents) at [47]. But insofar as Gina in her capacity as trustee was merely a co-owner of the documents, it has already been held that they (or a copy of them) fall within the obligation to provide trust documents to Bianca.

5. [22]

   Brereton J explained why categories 2 and 3 were formulated as they were. His Honour said at [45]:

6. [23]

   Thus where Gina in her capacity as trustee was a co-owner of the documents, it was clear that she either had to produce the document or a copy to the new trustee.

7. [24]

   Category 4 emerged from the fact that Gina appears to have intermingled the affairs of the trust and of HPPL. Essentially, Brereton J held that the new trustee should not be disadvantaged by the fact that the former trustee should have taken copies of documents owned by HPPL but used by her in the administration of the trust. His Honour said at [48], reasoning by analogy from what was held in Tiger v Barclays Bank Ltd [1952] 1 All ER 85:

8. [25]

   The distinction between the obligations based on ownership and those based on use were encapsulated in Lewin on Trusts (Sweet & Maxwell, 20th ed, 2020), Vol 1 at para 21-119:

9. [26]

   That passage cited, among other decisions, Hancock v Rinehart (Trust documents). It was in turn cited with evident approval, albeit obiter, by the New Zealand Supreme Court in Lambie Trust Ltd v Addleman [2021] NZSC 54 at [47]. (I note that in cases to which the Trusts Act 2019 (NZ) applies, s 48 now provides that “At the time that the trusteeship of a trustee ends, if the trust continues, the trustee must give at least 1 replacement trustee or continuing trustee the documents that the trustee holds at that time”. There is no counterpart in Western Australia (or for that matter New South Wales), where the form of the legislation traces to nineteenth century English statutes.)

10. [27]

    In short, in addition to the rights enjoyed by the incoming trustee by virtue of the vesting and deemed conveyance of trust property, the outgoing trustee’s obligation to provide documents may extend to documents in the possession of the outgoing trustee even though not owned by the outgoing trustee.

11. [28]

    Thirdly, it would be wrong to ask whether Bianca or some other beneficiary were entitled to access to the documents in her capacity as a beneficiary of the trust. The divergence reflected in Avanes v Marshall (2007) 68 NSWLR 595; [2007] NSWSC 191 and McDonald v Ellis (2007) 72 NSWLR 605; [2007] NSWSC 1068 and the applicability in this country of Schmidt v Rosewood Trust Ltd [2003] 2 AC 709; [2003] UKPC 26 may and should be put to one side. That is because the obligation of an outgoing trustee to provide documents to his or her successor is based on an entirely different footing from, and goes well beyond, the obligation of a trustee to provide documents to a beneficiary. It has been repeatedly said that cases concerning disclosure to beneficiaries are of little assistance in this area: Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405 at 433; In the matter of the Bird Charitable Trust and the Bird Purpose Trust (2012) (1) JLR 62 at [27]; Hancock v Rinehart (Trust documents) at [36]-[37].

12. [29]

    I mention this for two reasons. One is because it seems that in the earlier phases on the working out of the 2015 orders, some of the parties wrongly thought those principles had some application, a mistake which seems to have been shared by other litigants: see Wang v Cai [2021] NSWSC 1162 at [280]-[287]. The other is that while there have been some statements to the effect that a beneficiary’s entitlement to inspect trust documents is no longer based on property but on the court’s concern for proper administration (a helpful overview of the position may be seen in D Clarry, The Supervisory Jurisdiction over Trust Administration (Oxford University Press, 2018) at pp 155-162), that is controversial, especially in cases (such as the present) of a fixed trust. There is no reason to discount the effect of the vesting of property when determining the quite different issues in this litigation, arising between former and successor trustees. The relationship between trustee and trust property is at the core of a trust, and I see no reason to doubt that when analysing the obligations that arise when one trustee is replaced by another, the effect of the vesting of property is critical.

13. [30]

    Fourthly, there is a duty of co-operation owed by the former trustee to a successor trustee. This was formulated in In re Ogier Trustee (Jersey) Ltd [2006] JRC 158 at [7], applied In the matter of the Bird Charitable Trust and the Bird Purpose Trust at [24] and adopted by Brereton J in Hancock v Rinehart (Trust documents) at [39] thus:

14. [31]

    Lewin on Trusts states at para 21-121 that:

15. [32]

    In addition to Ogier Trustee (Jersey) Ltd the authors cite a passage in a decision striking out an action in negligence brought by a successor trustee in bankruptcy, Mond v Hyde [1997] BPIR 250 at 262D (“To decline to answer would be quite extraordinary”).

16. [33]

    Some care needs to be taken when dealing with the Channel Islands decisions (in addition to those of the Jersey Royal Court, there is also Rawlinson & Hunter Trustees SA v ITG Ltd (Guernsey Royal Court, 30 January 2017, which covers the same principles). In Bird it was mentioned at [19]-[24] that a narrow view of “trust property” for the purposes of the Trusts (Jersey) Law 1984 was adopted, limiting that term to assets which could be distributed to beneficiaries:

17. [34]

    The same point was made of the (slightly different) statute prevailing in Guernsey in Rawlinson & Hunter Trustees at [50]-[51]. That narrow approach is at odds with the breadth of equity’s conception of a trust. The advice of the Privy Council given by Lord Shaw in Lord Strathcona Steamship v Dominion Coal Co [1926] AC 108 at 124 stated:

18. [35]

    That was regarded as a basic premise by Campbell J in White v Shortall (2006) 68 NSWLR 650; [2006] NSWSC 1379 at [149] and by Jagot J writing for the Full Court in Ellison v Sandini Pty Ltd (2018) 263 FCR 460; [2018] FCAFC 44 at [122]. It may be that the narrow approach to trust property in decisions of the courts of the Channel Islands has led to a broader formulation of the obligation upon the outgoing trustee to deliver documents and provide information. But nothing turns on that for present purposes, for no part of this appeal challenges the existence of the obligation (and, indeed, that obligation was central to Gina’s submissions).

19. [36]

    Finally, it was accepted that there was a discretionary aspect to the incoming trustee’s entitlement to documents and information. This was framed by the Royal Court of Jersey in In the matter of the Bird Charitable Trust and the Bird Purpose Trust at [29] and endorsed by Brereton J in this litigation thus:

20. [37]

    Ultimately, that may be best seen as an aspect of the equitable orders that are sought, by way of delivery up – either as an aspect of the trustee’s entitlement to property or arising from the personal obligation to co-operate. A court of equity has an inherent authority to supervise and if necessary to intervene in the administration of trusts, as was noted in CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98; [2005] HCA 53 at [17]. But that does not mean that a current or former trustee or beneficiary has an entitlement to relief as of right.

21. [38]

    It seems clear in principle that the nature of the discretion depends upon the precise basis of the new trustee’s entitlement. The duty to provide information has a different basis from the duty to provide documents. The former cannot be based on property; the latter was traditionally understood as being based on property (at least in the case of fixed trusts like the present). Further, there may at least in principle be a difference in the exercise of discretion dealing with a chattel which is now owned by the new trustee, and a chattel which was never owned by the former trustee, but was used in the administration of the trust. It is one thing for a former trustee not to be beset with hundreds of requests for information, another to be obliged to make numerous copies of documents not owned by the trustee, and a third thing entirely to resist handing over a large quantity of documents of peripheral relevance to the administration of the trust but which were owned at law by the former trustee and paid for using trust funds. That said, in ordinary cases it is likely that the contents of the documents in dispute will be at least as centrally relevant to the exercise of the discretion as the juristic nature of the obligation to which the former trustee is subject. It is unnecessary to take this any further.

22. [39]

    The short point is that it may, sometimes, be unfair to order delivery up. Often that may be because of the magnitude of task. That was the concern to which courts which have addressed the discretion in previous cases have referred. But that is not the present case, where the documents are identified and of small compass. The existence of a discretion and the prominence it has been accorded in this litigation should not distort the basal proposition that, prima facie, the new trustee is to be placed in the same position as the former trustee.

The reasons of the primary judge

1. [40]

   As noted above, the primary judge rejected Gina’s submissions that the application was an abuse of process and the documents were not “documents of the trust”, but accepted both of Gina’s fallback positions. Although ordering production of the documents, her Honour stayed those orders pending the conclusion of the arbitration. Bianca appeals from the decision to stay the operation of the order requiring Gina to produce the documents. Ground 1 of the appeal challenges the stay insofar as it is based upon the risk of misuse. Ground 2 challenges the stay insofar as it is based upon the risk of breach of duty as a director.

2. [41]

   The reasons of the primary judge rejecting Gina’s submission of an abuse of process, but accepting her fallback submissions that the order for delivery up should be stayed, or alternatively dispensed with, are concise (this reflects the fact that in large measure her Honour’s reasoning and findings are unchallenged in this appeal). They are found in [231]-[234] and [253] of her Honour’s judgment:

The utility of the appeal

1. [42]

   It will have been noted that in [234] the primary judge made it clear that her orders were without prejudice to any order for production of the documents in the Martin Arbitration. Plainly, if that had occurred, that would bear upon the utility of the present appeal.

2. [43]

   This arose at the hearing as follows:

3. [44]

   The Court returned to this point at the conclusion of Mr Bova’s submissions:

4. [45]

   Senior counsel for Bianca commenced his reply as follows:

5. [46]

   I intend to convey no criticism of counsel’s reticence at answering a question without notice about an aspect of the arbitration; Mr Bova was quite correct to be conscious of the obligations of confidentiality binding him. However, if the documents had in fact been provided to Bianca through discovery in the arbitration, disclosure of that fact would be necessary for at least three reasons: (a) in order to prevent this Court from proceeding on a materially incorrect basis of the utility of what is yet another interlocutory appeal, (b) in order to prevent an abuse of process and (c) in order to permit the parties and their lawyers to comply with the dictates of s 56 of the Civil Procedure Act. The primary perceived advantage of arbitration in this country is its confidentiality, and that is recognised by statute, but it is not unqualified.

6. [47]

   Accordingly, I shall proceed on the basis that the issue is not academic. I express no view on Gina’s reasons for resisting production of the documents in the Martin Arbitration, in light of the fact that this Court has an incomplete understanding of the position (once again, no criticism is intended or conveyed by that statement).

The contingent notice of contention

1. [48]

   Logically, the starting point for analysis might be thought to be the notice of contention that the application was an abuse of process. That was how it was approached by the primary judge, and the notice of contention was drafted on an unqualified basis.

2. [49]

   However, Gina’s oral and written submissions were propounded on the basis that the notice of contention was contingent upon error being shown. Thus it was said that “[i]f the Court concludes that the primary judge’s discretion miscarried, it will be required to re-exercise the discretion. In that event, [Gina] contends that execution of the order … should be stayed on the further grounds that [Bianca] is seeing production for an improper purpose and that she is taking inconsistent positions in this proceeding and the Martin Arbitration”. The same stance was adopted in oral submissions (T65.30).

3. [50]

   I shall follow the same course.

What did the primary judge find concerning the ownership of the Sceales Files and Bankruptcy Transcripts?

1. [51]

   Senior counsel for Gina insisted that the primary judge did not find, and was not asked to find, that the documents were property of the trust. She complained that it was not open to Bianca to contend in this Court that the documents were trust property. For example, it was said, forcefully, that “[c]ontrary to the appellant’s repeated and unexplained assertion, the documents are therefore not ‘property’ of the HMH Trust in the sense of chattels owned by the first respondent for the benefit of that trust”. In oral addresses, Bianca insisted that the primary judge had been asked to find, and had in fact found, that Gina had owned or co-owned the documents, while the tenor of Gina’s submissions was that the finding of the primary judge was based on Category 4 and that category alone, with the consequence that there was no finding that Gina had any proprietary interest in the documents, and that Bianca’s entitlement was based on what was styled as an “equitable duty of co-operation”.

2. [52]

   Although this is in a sense at one stage removed from the grounds of appeal, I shall address it, not because it was fiercely contested in the oral and written submissions in this Court, but because it is an anterior issue which informs the exercise of discretion which Bianca sought to impugn and which Gina sought to affirm.

3. [53]

   I do not accept either side’s submissions in full. The position is more nuanced.

4. [54]

   First, contrary to Gina’s submissions, the record demonstrates that Bianca did in fact assert that the Sceales Files and Bankruptcy Transcripts were property of the trust. Senior counsel then appearing for Bianca said:

5. [55]

   But it is true that the gravamen of Bianca’s submissions to her Honour reflected the criticisms made by this Court in refusing leave to appeal from the Hancock v Rinehart (Trust documents) judgment, and for the most part did not resort to an analysis of ownership. Thus Bianca’s written submissions identified two bases on which the Sceales Files were required to be produced, namely “First basis: the Sceales Files were received by Gina or on her behalf as trustee” and “Second basis; the Sceales Files were used by Gina or on her behalf as trustee”.

6. [56]

   Consistently with this, senior counsel then appearing for Bianca said, immediately following the passage reproduced above:

7. [57]

   Secondly, the point of the submission made by counsel who appeared for Bianca before the primary judge was that if the documents had been used by Gina as trustee, then their ownership was irrelevant. If they were owned or co-owned by Gina in her capacity as trustee, they fell within Categories 1, 2 or 3, and prima facie were required to be delivered. Even if they were not owned or co-owned by her as trustee, they still had to be delivered to Bianca as falling within Category 4, on the basis that Gina’s failure to keep trust documents separate from other documents could not be relied upon to the disadvantage of the incoming trustee.

8. [58]

   Thirdly, the primary judge acceded to both aspects of the submission made on behalf of Bianca. The unchallenged, dispositive reasoning as to the status of the Sceales Files is at [146]-[148]:

9. [59]

   It will be recalled that Category 3 was “all documents received or held by her or on her behalf in her trustee capacity, in which the Trust and another entity or entities also have a proprietary interest”. The second and third sentences in [147] (which are emphasised above) express the conclusion that the Sceales Files are apt to fall within category 3, while the fourth sentence expresses the conclusion that they are also apt to fall within category 4. That conclusion derives from the following considerations:

   1. (1)

      First, it reflects the two bases upon which Bianca’s submissions were advanced: the “first basis” being documents received by Gina or on her behalf as trustee, and the “second basis” being documents used by Gina or on her behalf as trustee.

   2. (2)

      Secondly, the second and third sentences substantially mirror the language of category 3, while the fourth sentence substantially reflects the language of category 4.

   3. (3)

      Thirdly, the word “Further” commencing the fourth sentence is naturally understood as identifying a separate aspect of for the conclusion that the documents were “documents of the Trust”.

10. [60]

    It will be seen that her Honour was economical with findings on this issue. That approach was consistent with the cautionary words of this Court reproduced above about the technicality and aridity and potential circularity of findings based on property and the conventional curial parsimony of only making findings to the extent necessary to resolve the dispute. The effect of her Honour’s reasoning was that if Gina as trustee had a proprietary interest in the documents, they fell within Category 3, and if she did not, then they fell within Category 4. Either way, they had to be produced, and it was unnecessary to determine in which category they fell because whatever that be, they were “documents of the Trust”.

11. [61]

    The alternative submission, advanced by Gina, is that there was a finding only that the documents fell within category 4 and which impliedly found that Gina as trustee did not have a proprietary interest in the documents. That is a decidedly unnatural way of reading the paragraph. There is nothing in the language to convey an actual finding that Gina did not own or co-own the documents. And Gina’s submission is inconsistent with the words which introduced the third sentence of [147]: “The fact that HPPL may have a proprietary interest in the Sceales Files …”. That language is inconsistent with an implicit finding that HPPL in fact owned or had a proprietary interest in the Sceales Files. But the language accords with Bianca’s submissions to her Honour that a precise identification of ownership or property rights was not to the point and unnecessary insofar as it did not matter for the purpose of identifying whether the Sceales Files were “documents of the Trust”.

12. [62]

    That is to say, the sense of the submission made to her Honour by Bianca was that the issue of any ownership of HPPL might be put to one side. If HPPL was a co-owner with Gina, the document fell within Category 3. If HPPL was the sole owner, then even so if it was used in the administration of the trust, then it fell within Category 4. This is quite different from Gina’s submission that her Honour positively found that the documents were not property of the trust in the sense of chattels owned or co-owned by Gina in her capacity as trustee because they fell within Category 4.

13. [63]

    Thus, contrary to Bianca’s submission, I do not accept that her Honour found that Gina had owned or co-owned the documents in her capacity as trustee. I agree with Gina’s submission that the substance of Bianca’s submission had been that her Honour did not have to make any such finding. However, contrary to Gina’s further submission, I do not accept that the only basis upon which her Honour found that the Sceales Files and the Bankruptcy Transcripts were “documents of the Trust” was because they fell in Category 4 and were thus documents in which Gina did not have a proprietary interest. Her Honour found that they were either in Category 4 or in an earlier category, and either way were prima facie to be produced to Bianca.

14. [64]

    As noted above, I think that the exercise of the discretion to order production is affected by whether the new trustee is the legal owner of the pieces of paper, or is a co-owner, or is entitled to copies of the paper only because the outgoing trustee mixed up trust documents with non-trust documents which were used in the administration of the trust. Hence in some cases, the failure to make a precise finding as to the nature of the proprietary interest of the former trustee which is now vested in the current trustee may be problematic. However, in the present case, for the reasons I shall address immediately, it makes no difference.

The discretion of the primary judge miscarried

1. [65]

   The primary judge expressed concern at the “spectre” of misuse of the documents by Bianca in her personal capacity in the Martin Arbitration. I respectfully disagree that that is a material consideration.

2. [66]

   First, Bianca is advised by practitioners who are more than competent. It is unreal to think that she will deploy the documents in the arbitration without first taking advice. Not lightly would one infer that she will misuse the documents, or the information they contain.

3. [67]

   Secondly, there is no reason to doubt that other parties to the arbitration, including Gina, who is also advised by practitioners who are more than competent, will do anything other than vigorously defend such entitlement as they may have not to be subjected to the misuse of documents or information. The appropriate venue for that to occur is the arbitration, which is fully apprised of the issues, and not this Court, where the real issues are shrouded in confidentiality.

4. [68]

   Thirdly, Gina protested, repeatedly, that her opposition to production was altruistic: she was not seeking to gain any advantage for herself, but rather to prevent “detriment” to the “interests of the trust”. That submission warrants unpacking.

5. [69]

   The trust has vested. There is no such legal person as a trust. There are four beneficiaries. The “interests of the trust” can mean nothing more nor less than the interests of the four beneficiaries. All four are of age. None objects to the delivery of trust documents to the new trustee.

6. [70]

   This was raised this during the hearing:

7. [71]

   There is no compelling reason to think that Gina’s objection to production is wholly altruistic, in the sense that irrespective of any benefit or detriment to herself, she is objecting to produce documents to her successor trustee in order to prevent Bianca from the risk of misuse. The contents of the documents are known to Gina and Gina alone. How they are likely to be used is something which Gina is better placed than anyone else to assess. The history to this litigation makes it not unlikely that Gina apprehends that the documents contain information which may be used against her. If so, that would mean that in this litigation, in her capacity as former trustee, she is seeking dispensation from an obligation because of a fear that she will be disadvantaged in another forum in her personal capacity. This would be the clearest conflict between her fiduciary obligation as former trustee, and her self-interest. The former prevails.

8. [72]

   If on the other hand the use of the documents gives rise to no detriment to Gina, but might impact any of Bianca’s siblings (who are the other three beneficiaries of the trust), then all are parties to the Martin Arbitration. So far as the evidence discloses, they have not to date complained of a breach of the fiduciary duty owed by Bianca to them. If the use of the documents is a breach of duty, then it may be expected that they will either oppose the use, or authorise Bianca to do what would otherwise be a breach of trust.

9. [73]

   Either way, I respectfully disagree with the primary judge that any spectre of misuse is a reason for withholding production. That conclusion is reached irrespective of whether (as Gina contends) the sole basis on which the documents are “documents of the Trust” is Category 4, or whether (as I consider to be what occurred) the primary judge did not exclude the possibility that Gina had a proprietary interest in the documents which has now vested in Bianca.

10. [74]

    The second reason given by the primary judge was that “it appears that Bianca has no immediate need for the documents”, which was said to tell “strongly” towards a stay. Once again, I must respectfully disagree. Bianca does not know the contents of the documents and is in no position to make submissions as to whether there is an immediate need. Bianca as trustee is entitled to investigate breaches of trust, and if a possible breach comes to her notice, she may be obliged to investigate it. This cannot occur until she has the documents.

11. [75]

    There is another way of making this point. Insofar as the documents were owned, or co-owned, by Gina, they are now owned or co-owned by Bianca, and the immediacy or otherwise of her need for them is irrelevant. It is no answer to an owner’s claim for possession for a bailee to say that the owner has no present need of the chattel. But even if the documents are documents falling within Category 4 (ie documents in which Gina had no proprietary interest, which were nonetheless used in the administration of the trust and of which, had Gina kept the affairs of HPPL and the trust separate, she would have made a separate copy) then even so I remain unpersuaded that the incoming trustee should be kept out of the documents. Why should the fact that Gina did not clearly distinguish between HPPL documents and trust documents be used as an excuse to prevent her successor from obtaining access to all the documents which Gina used in the administration of the trust, when there is no issue of inconvenience or expense or burden in doing so?

12. [76]

    Ground 1 is made out.

13. [77]

    Ground 2 was a challenge to the alternative basis given by the primary judge for the stay, namely, Gina’s application for dispensation. This turned first on Gina’s submission that production of the documents would likely result in Gina being in breach of her duties to HPPL. In response to Bianca’s submission that no breach was identified, Gina submitted:

14. [78]

    I respectfully disagree.

15. [79]

    First, it is no answer of itself to an obligation by a trustee who chooses to retire to deliver trust documents to her successor to say that doing so may put her in breach of duties the outgoing trustee owes in a different capacity to other companies. That submission merely leads to a further question: which is to prevail: the fiduciary obligation owed by the former trustee, or the duty owed in a different capacity to some other person? I would add that there is a measure of forensic unreality to Gina’s submission, insofar as it turned upon an obligation owed to HPPL. HPPL is a party to this proceeding, and played an active role before the primary judge, but has submitted to this appeal. It makes no claim that there is any breach by Gina of a duty owed by her to it.

16. [80]

    Secondly, either the documents are to be provided to Bianca because she owns or co-owns them following the vesting order, or else they are documents which Gina had received and should have made copies of when she was a trustee. But in either case, I fail to see how complying with a direct obligation owed to a successor in title, or taking steps to make a copy to provide a document which should have been copied when she was a trustee and providing that to the new trustee, would amount to a breach of duty. If there is a breach of duty, it came about because of either or both of Gina’s decisions (a) to resign from her office of trustee and (b) to fail to maintain a rigorous separation between trust documents and company documents. The order requiring production of documents is merely the ordinary consequence of Gina’s earlier choices.

17. [81]

    Thirdly, if as Gina says the documents are relevant to the issues in the Martin Arbitration but for some reason Bianca should not be permitted to access to them, then that is a matter best adjudicated in the arbitration which is apprised of the issues, not this Court which is not.

18. [82]

    This ground is also made out.

The primary judge correctly declined to find any abuse of process

1. [83]

   Against the possibility that this Court would re-exercise the discretion favourably to Bianca, Gina maintained that this Court should find that Bianca’s application was an abuse of process, because she sought documents for an improper purpose.

2. [84]

   Gina acknowledged that her case was an inferential one. She relied on the primary judge’s finding that the documents were “clearly relevant to [Bianca’s] personal claims in the Martin Arbitration and of no apparent relevance to the administration of the HMH Trust”. She said that search terms which had been deployed as part of the consensual regime for the production of documents (such as “Debt Reconstruction”, “HFMF” and “Plan of 22 June 1988”) suggested that she was seeking documents in her personal capacity and not as relevant to the administration of the trust. She relied upon Bianca’s failure to provide an explanation of her purpose.

3. [85]

   Alternatively, Gina submitted that Bianca sought the documents “on the basis that [Gina] controlled HFMF for the HMH Trusts”, whereas “in the Martin Arbitration, [Bianca] contends that control of HFMF was an asset of the separate HFMF Trust. On ordinary principles of abuse of process, [Gina] ought not be vexed by such inconsistent contentions in overlapping proceedings.”

4. [86]

   These submissions were not developed orally. I do not accept that Gina has made out the serious allegation that Bianca’s application is an abuse of process and should on that basis be refused. It does not fall to Bianca to explain her purpose in obtaining the trust documents. She is under an obligation to obtain the documents of the trust as incoming trustee, just as Gina is under an obligation to hand trust documents over to her successor. Insofar as Gina’s submissions turn on the claims made in the Martin Arbitration, the arbitrators are well placed to adjudicate whether any use made of the documents is improper. Two reasons why that is so are that (a) the precise issues, and the evidence which will be adduced by the parties, will be before the arbitrators and (b) all four beneficiaries of the trust are parties to the arbitration, and they may either consent to any use by Bianca, or alternatively oppose any such use, on the basis that Bianca is in breach of a duty owed to them. Finally, the extent of Gina’s obligation to provide trust documents to her successor as trustee should have been resolved years ago. The fact that by reason of delay aspects of the dispute now overlap with the arbitration does not excuse Gina from placing her successor trustee in the same position she had been.

The re-exercise of the discretion and orders

1. [87]

   For those reasons, the appeal must be allowed and the discretion re-exercised. It will be plain from the above that this is a clear case for Gina to be ordered to provide the Sceales Files and the Bankruptcy Transcripts to Bianca. If those documents were owned or co-owned by Gina in her capacity as trustee, they are now owned or co-owned by Bianca (and have been since 28 May 2015) and should be made available to their new owner or co-owner. If the documents were not owned nor co-owned by Gina, then they were used by her in the administration of the trust, and Bianca is not to be placed in a disadvantageous position as incoming trustee by reason of Gina’s failure to distinguish between documents held by her in other capacities and documents held by her as trustee. Insofar as there are concerns raised by Gina regarding the use of the documents in the Martin Arbitration, the concerns are those of persons who are not parties to this proceeding, but who are parties to that arbitration, and the validity of those concerns is much better addressed in the arbitration than in this Court. Gina’s submissions that Bianca has no present need for the documents are not an answer to the obligation to provide them to her successor as trustee, nor is her concern that doing so may be a breach of some duty she owes to another company, nor is any inconsistency in position taken by Bianca in this litigation and the arbitration.

2. [88]

   Accordingly, the stay should be lifted. The orders I propose will have the effect that Gina must provide the Sceales Files and the Bankruptcy Transcripts within 14 days of today. Costs should follow the event.

3. [89]

   My present view is that nothing in these reasons reflects anything other than materials tendered without restriction, or submissions made in open court. (I am conscious that some of the submissions were said to be confidential, and without expressing a view on the accuracy of that proposition, they have not been included in this judgment.) However, in light of the concerns that have been expressed, I would propose that this judgment not be published on CaseLaw for a period of 7 days. If there is an application for any orders under the Court Suppression and Non-publication Orders Act 2010 (NSW), then that may be made on motion supported by affidavit and short submissions within that timeframe. Any such application will need to have regard to the provisions of that statute.

4. [90]

   I propose the following orders:

   1. (1)

      Appeal allowed.

   2. (2)

      Set aside the stay of orders 2 and 3 made on 17 December 2020 with effect from 14 days from today, and in lieu thereof dismiss Gina’s application for a stay or for dispensation from production.

   3. (3)

      Note that the effect of order 2 above is that Gina is required to deliver up the Sceales Files and the Bankruptcy Transcripts to Bianca no later than 14 days from today.

   4. (4)

      Set aside order 2 made on 6 January 2021, and in lieu thereof order that Gina pay Bianca’s costs of Bianca’s amended notice of motion seeking delivery up of the Sceales Files and Bankruptcy Transcripts and of Gina’s application to stay the delivery up of those documents or for dispensation in relation thereto.

   5. (5)

      Gina to pay Bianca’s costs of the appeal.

5. [91]

   WHITE JA: I agree with Leeming JA.