Abstract
In this episode of Trusts Talk, Mark Bennett and Adam Hofri-Winogradow interview Professor Katy Barnett of Melbourne Law School about Australian trust law, protectors, appointors, guardians, settlor control, and the fiduciary limits on trust powers.
For show notes with links, go to: https://docs.google.com/document/d/1bCdkJTPbeuFCg83X0xD-WnaT0pW_gs1TS0EW75-1jLc/edit?tab=t.0
Professor Barnett’s open-access article “Protectors and guardians: observations from Australia” is a useful companion to the episode, especially on protector powers, fiduciary obligations, illusory trust concerns, and drafting risks. For those with access, her paper “‘Pistols at dawn’ and the powers of trustees, appointors, and guardians: who comes trumps in a dispute over a family trust?” is also relevant.
The conversation begins with Australia’s strong equity and trusts tradition. Barnett traces this history through early colonial legal disorder, the 1808 Rum Rebellion, and the Burwood Estate litigation discussed in her article with Lynne Barnett, “‘Equity’s Darling’ and the Burwood Ejectment Case”. That background helps explain New South Wales’ distinctive equity culture, including the early creation of a judge responsible for equity, the long-running role of the Primary Judge in Equity, and the late fusion of law and equity in NSW.
Barnett then turns to modern Australian trust practice. She explains how discretionary family trusts often use appointors, guardians or protectors to supervise corporate trustees and control succession within family wealth structures. These offices can be useful, but they also produce intense control disputes. Cases discussed include Staley v Hill Family Holdings Pty Ltd [2025] QCA 95, Mercanti v Mercanti [2016] WASCA 206, and Cihan v Cihan [2022] NSWSC 538.
A central theme is that protector and appointor provisions require careful drafting. Barnett warns against assuming that a family patriarch, matriarch or dominant family member is the right person to hold a control office. The episode discusses “battle of the deeds” disputes, trustee removal powers, and the need to specify whether powers are fiduciary, personal, constrained, or subject to procedural requirements.
The discussion then moves to fiduciary duties. Barnett distinguishes the strict core of fiduciary law — especially the no-conflict and no-profit rules — from broader uses of fiduciary language involving proper consideration, decision-making process and trustee deliberation. Cases discussed include Pitt v Holt; Futter v Futter [2013] UKSC 26 and Ashley Dawson-Damer v Grampian Trust Company Ltd [2025] UKPC 32.
The episode also connects protector powers to settlor control and illusory trusts. Barnett and the hosts discuss whether a trust remains a trust when the settlor, beneficiary, protector and controller roles collapse into the same person. Key examples include Clayton v Clayton [Vaughan Road Property Trust] [2016] NZSC 29 and JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2017] EWHC 2426 (Ch). For further analysis, see Mark Bennett’s article “The Illusory Trust Doctrine: Formal or Substantive?”.
Barnett also offers a nuanced view of offshore trusts, distinguishing legitimate uses from arrangements that push settlor autonomy and asset protection too far. The episode ends with a forceful discussion of trustees borrowing trust funds, including the conceptual and practical problems that arise when a trustee, including a bank, becomes both trustee and creditor.
Timestamps
01:00 Welcome and introduction to Professor Katy Barnett
03:40 Australia as a stronghold of trust law and trusts scholarship
04:15 Convict ancestors, the Rum Rebellion, Burwood Estate and the origins of NSW equity
10:05 New South Wales’ separate equity tradition and the status of equity today
11:20 Tang Hang Wu’s teaching ideas and the turn to protectors and appointors
14:05 Appointors, guardians and protector-like offices in Australian trust practice
15:20 Relationship breakdowns, removal powers and “battle of the deeds” disputes
18:00 Cihan v Cihan and the practical risks of patriarchal control
20:00 Why use protectors at all? Control, safeguards and discretionary trusts
25:20 Fiduciary duties, proper consideration, Pitt v Holt and Dawson-Damer
31:10 Prescriptive vs proscriptive duties, terminology and learning from mistakes
39:10 Reviewing protector powers and drafting limits on discretion
43:20 Illusory trusts, multiple hats, Clayton and Pugachev
49:00 Offshore trusts: from “evil trusts” to a more nuanced view
53:10 Trustees borrowing trust funds and banks as trustee-creditor
57:30 Wrapping up: prudence, drafting and the human side of trust law
For show notes with links, go to: https://docs.google.com/document/d/1bCdkJTPbeuFCg83X0xD-WnaT0pW_gs1TS0EW75-1jLc/edit?tab=t.0
Professor Barnett’s open-access article “Protectors and guardians: observations from Australia” is a useful companion to the episode, especially on protector powers, fiduciary obligations, illusory trust concerns, and drafting risks. For those with access, her paper “‘Pistols at dawn’ and the powers of trustees, appointors, and guardians: who comes trumps in a dispute over a family trust?” is also relevant.
The conversation begins with Australia’s strong equity and trusts tradition. Barnett traces this history through early colonial legal disorder, the 1808 Rum Rebellion, and the Burwood Estate litigation discussed in her article with Lynne Barnett, “‘Equity’s Darling’ and the Burwood Ejectment Case”. That background helps explain New South Wales’ distinctive equity culture, including the early creation of a judge responsible for equity, the long-running role of the Primary Judge in Equity, and the late fusion of law and equity in NSW.
Barnett then turns to modern Australian trust practice. She explains how discretionary family trusts often use appointors, guardians or protectors to supervise corporate trustees and control succession within family wealth structures. These offices can be useful, but they also produce intense control disputes. Cases discussed include Staley v Hill Family Holdings Pty Ltd [2025] QCA 95, Mercanti v Mercanti [2016] WASCA 206, and Cihan v Cihan [2022] NSWSC 538.
A central theme is that protector and appointor provisions require careful drafting. Barnett warns against assuming that a family patriarch, matriarch or dominant family member is the right person to hold a control office. The episode discusses “battle of the deeds” disputes, trustee removal powers, and the need to specify whether powers are fiduciary, personal, constrained, or subject to procedural requirements.
The discussion then moves to fiduciary duties. Barnett distinguishes the strict core of fiduciary law — especially the no-conflict and no-profit rules — from broader uses of fiduciary language involving proper consideration, decision-making process and trustee deliberation. Cases discussed include Pitt v Holt; Futter v Futter [2013] UKSC 26 and Ashley Dawson-Damer v Grampian Trust Company Ltd [2025] UKPC 32.
The episode also connects protector powers to settlor control and illusory trusts. Barnett and the hosts discuss whether a trust remains a trust when the settlor, beneficiary, protector and controller roles collapse into the same person. Key examples include Clayton v Clayton [Vaughan Road Property Trust] [2016] NZSC 29 and JSC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2017] EWHC 2426 (Ch). For further analysis, see Mark Bennett’s article “The Illusory Trust Doctrine: Formal or Substantive?”.
Barnett also offers a nuanced view of offshore trusts, distinguishing legitimate uses from arrangements that push settlor autonomy and asset protection too far. The episode ends with a forceful discussion of trustees borrowing trust funds, including the conceptual and practical problems that arise when a trustee, including a bank, becomes both trustee and creditor.
Timestamps
01:00 Welcome and introduction to Professor Katy Barnett
03:40 Australia as a stronghold of trust law and trusts scholarship
04:15 Convict ancestors, the Rum Rebellion, Burwood Estate and the origins of NSW equity
10:05 New South Wales’ separate equity tradition and the status of equity today
11:20 Tang Hang Wu’s teaching ideas and the turn to protectors and appointors
14:05 Appointors, guardians and protector-like offices in Australian trust practice
15:20 Relationship breakdowns, removal powers and “battle of the deeds” disputes
18:00 Cihan v Cihan and the practical risks of patriarchal control
20:00 Why use protectors at all? Control, safeguards and discretionary trusts
25:20 Fiduciary duties, proper consideration, Pitt v Holt and Dawson-Damer
31:10 Prescriptive vs proscriptive duties, terminology and learning from mistakes
39:10 Reviewing protector powers and drafting limits on discretion
43:20 Illusory trusts, multiple hats, Clayton and Pugachev
49:00 Offshore trusts: from “evil trusts” to a more nuanced view
53:10 Trustees borrowing trust funds and banks as trustee-creditor
57:30 Wrapping up: prudence, drafting and the human side of trust law
| Original language | English |
|---|---|
| Media of output | Online |
| Publication status | Published - Jun 5 2026 |
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