“Northgate Park represents a less strict approach to determining the terms of a trust where a deed is lost,” Mr Backhaus said.

“The court’s ruling illustrates that even where no document exists, a court may be willing to accept evidence as to the likely terms of a trust based on expert evidence of the usual approach to drafting at the relevant time the trust was established.”

The case regarding the lost deed came from other litigation occurring in respect of the Floyd Family Trust.

It became evident during the litigation in the Victorian Supreme Court that the deed of the trust was missing.

Subsequently, the court had to determine firstly whether the existence of the trust could be established and, if so, under what terms the trustee was obligated to perform its role as trustee, or whether the trust would fail due to uncertainty.

“The court accepted evidence that the trust was established in 1991, the deed of which had been lost, and had continued to operate since that time,” Mr Backhaus said.

He continued that despite several searches the 1991 deed had not been found, and in 2015 two further replacement trust deeds were executed to replace it.

“The 2015 deeds acknowledge that the 1991 deed was lost and agreed on the terms and key roles of the trust, such as the trustee and appointors,” he said.

The court was presented with independent expert evidence by a lawyer who had extensive experience in drafting discretionary trust deeds.

The evidence focused on how instructions to prepare trust deeds usually came about; who the trust would usually benefit; who would usually hold the key roles of trustee and appointor; and the usual terms included in trust deeds from that period, including what the variation power would likely contain.

“Based on this and other evidence, the court found that it had been established on the balance of probabilities who the trustee and primary beneficiaries were, who the appointor was, what the variation power would have provided,” Mr Backhaus continued.

“The court then applied these findings to determine the effectiveness of the 2015 deeds.”

It found that various parts of the 2015 deeds were effective and therefore properly formed the terms of the trust, while others were ineffective and severed those from the terms of the trust.

The court then provided a revised set of terms of the trust as an annexure to the judgment.

“The parties to Northgate Park appeared broadly to agree regarding the adoption of the expert evidence and ultimately the agreed terms of the trust,” Mr Backhaus said.

“This case further reiterates that the courts are willing to adopt an approach where those involved in the trust agree on how the trust will continue.”

He concluded that a trustee’s first duty is to administer the trust under its terms.

“This requires that the trustee is able to read and know the terms of the terms of the trust,” he added.

“However, many trustees are finding that they are not able to produce all documents forming the document trail of their trust, and thus they cannot prove they are complying with this basic duty.”