ReSolution Issue 18, September 2018 | Page 12

b. the ability of the High Court to exercise inherent jurisdiction over trusts is simply an expression of the courts general role in vindicating the rights of parties in commercial and other relationships. The same objection is not raised in relation to the law of contract although the same generalisation could be made; and
c. the proposed court supervision in the Trusts Bill is primarily procedural (approval of arbitration and appointment of the arbitrator) substantive oversight is passed to the arbitrator on appointment.
The objection that court supervision of trust arbitration is required – to the extent of needing court approval before you can arbitrate - because it involves a trust is therefore, incorrect and not even carried through into the Trusts Bill.
It is, also, not a position even supported by the courts. For example in the case of Welker v Rinehart6 - which was the dispute between Gina Rinehart and her children about various trusts – the New South Wales Supreme Court (in a judgment upheld on appeal) said in relation to a dispute resolution clause in a dispute about removing a trustee that:7
…there is no reason why a dispute between beneficiaries and a trustee, including an application by beneficiaries for removal of the trustee, could not be referred to arbitration and, a fortiori, mediation…If anything, public policy encourages the private resolution of disputes concerning family matters, and there is no reason why this should not include family trusts.
A similar approach was taken by Lord Denning in In re Tuck's Settlement Trust8 where he said:
I see no reason why a testator or settlor should not provide that any dispute or doubt should be resolved by his executors or trustees, or even by a third party…If two contracting parties can by agreement leave a doubt or difficulty to be decided by a third person, I see no reason why a testator or settlor should not leave the decision to his trustees or to a third party.
In addition the argument that court supervision of trust disputes is required is entirely circular; court supervision of trust disputes can only be required if it is assumed that trust disputes are not arbitrable to begin with.9
That raises the question of what the underlying concerns of Report writers actually are? Is it that arbitrators – generally senior lawyers and retired judges – are incapable of selecting appropriate representatives for minor, unborn and unascertained beneficiaries and only an active judge can?
Or is it that arbitrators – again being senior lawyers and retired judges - will "get the law wrong"?
Such concerns are already dealt with via the Arbitration Act by way of:
a. the provisions relating to the setting aside and resisting enforcement of arbitral awards (especially where there are breaches of natural justice); and
b. the provisions relating to appeals on questions of law.
This important aspect of the court's jurisdiction was recognised in Welker by the New South Wales Court of Appeal when Bathurst CJ said:10
[t]he supervisory jurisdiction of the court is not ousted. It continues to have the supervisory role conferred upon it by the relevant legislation, in this case the Commercial Arbitration Act.
It is acknowledged that trust disputes are unique and do require special provisions. That is provided for by way of allowing the arbitrator to appoint representatives for those who cannot represent themselves. If an arbitrator proceeded without making such an appointment then any award made would not be binding on them anyway which is the ultimate protection.
The Trust Law Committee
Finally the Report is inconsistent with the 201111 report of the Trust Law Committee (TLC). The TLC was set up in the summer of 1994 as a group of leading academics and practitioners dedicated to researching