Commentary on Sections Part 1 – Trusts Duty to provide information
52.Section 29 of the Act implements recommendations 30 to 36, and 44. It is mandatory, and therefore applies regardless of what the trust deed provides (recommendation 35). It applies to trusts whenever created, including those created before the Act is enacted and comes into force. It does not generally apply to private purpose trusts, which often do not have any beneficiaries with a personal interest in the trust property. Where there are such beneficiaries under a private purpose trust, section 29 will apply (subsection (7); recommendation 44). This section, together with section 30, sets out the basic duty on trustees to provide information to beneficiaries and others. This is the first time in Scots law that there is a statutory duty of this nature. It is intended to reinforce the fundamental and long-standing right of the beneficiaries to hold the trustees to account. Subsection (1) sets out the main mandatory duty, which is that the trustees must inform a person of that person’s beneficial interest in the trust and, in addition, must inform the person who the trustees are and how to contact them. The point at which the information is to be provided is set out in subsection (4), and trustees have deliberately been given a discretion in this regard. Equally, the list in subsection (2) of people who must be informed of their status has an element of discretion for the trustees. It would not be practicable to impose a rigid or prescriptive rule here as the circumstances of individual trusts will vary enormously. Subsection (3) imposes a duty on trustees to take appropriate steps to identify and trace those whom they might be required to inform under subsection (1); in practical terms, this is what trustees should be doing anyway as it is a basic part of trust management to know who the beneficiaries are and how to contact them. It is included here, however, to remind trustees of their duty in the present context. The same applies to subsection (5): it removes any doubt that the duty to inform does not embrace a duty to advise. Indeed, there may be situations in which it would be inappropriate for any advice to be given by the trustees. Subsection (6) is also intended to avoid doubt, this time as to whether or not the duty to provide information is a continuing one: the subsection states that changes to the information provided under subsection (1) must be communicated without delay.
53.Section 30 of the Act implements recommendations 30, 37 to 40, and 44. It generally applies to trusts, whenever created, but not to private purpose trusts except to the extent that there are beneficiaries (recommendation 44). It is a default provision, though there are particular controls on any limitations imposed in the trust deed. The duty on trustees complements that in section 29 of the Act, which obliges trustees to inform people of their beneficial interest in the trust. Under section 30, trustees are obliged to consider requests for further information made by those with an interest. Where appropriate, they are under a duty to comply with those requests. Subsection (1) sets out the broad duty on trustees, namely to provide trust information which is requested by anyone falling within any of the specified classes. They need not do so if they consider that it would be inappropriate to do so or where a potential beneficiary has only a negligible interest in the trust. This implements recommendation 37. A presumption as to what classes of information will ordinarily not be disclosed is set out in subsection (7): this includes information about other people (which is in any case subject to data protection legislation), reasons for trustees’ decisions (which are generally private to the trustees), and letters of wishes (i.e. documents in which a truster may set out non-binding guidance for the trustees as to how he or she would wish the trustees’ powers to be exercised). Subsection (4) allows the trustees to disclose the information in an appropriate way and to charge for any reasonable expenses. In the event of doubt as to what information should be disclosed under this section, there is provision for the trustees to seek a direction from the Court of Session on the matter, and also for those whose request has been declined to apply to the Court of Session for a ruling (under subsections (8) and (9) respectively). In many cases it will be clear whether requested information should be disclosed or not but these procedures will be useful for the definitive resolution of any doubt or dispute. By subsection (2)(a) the truster may, in the trust deed, limit (or expand) the duty of disclosure. However, subsections (10) to (12), which implement recommendation 38, provide that any limitation is subject to review by the Court of Session; this will guard against attempts to deprive beneficiaries of the basic information to which they should be entitled. This power is not available to potential beneficiaries who have only a negligible interest in the trust. The Court of Session will determine whether the limitation is reasonable in all the circumstances, and an important factor will be the extent to which it impedes the ability of the beneficiary to hold the trustees to account. If the Court of Session finds a limitation unreasonable, it may either alter it or rescind it altogether. An application may be brought at any time after the trust has been created. Finally, the duty in section 30 applies to newly created trusts but, for those already in existence when the legislation comes into effect, there is a grace period of a year(11) (subsections (14) to (16) and recommendation 39).