When there is no trust in a trustee….

Julia and her siblings were beneficiaries of their late grandfather’s estate. The estate was administered by a professional trustee. Unfortunately, the trustee made errors in the administration of the estate; for example, it did not invest certain funds promptly, meaning the estate lost out on interest it otherwise would have earned. Julia and her siblings were not happy about this, and Julia raised the issue with the trustee. That caused the trustee to review all the work it had done on the estate, and it identified other errors it had made, such as incorrectly charging a fee. It made a payment to Julia and her siblings of over $10,000, to compensate them for every error it had made. It also offered them a further sum of $10,000 as a goodwill payment.

 

Julia’s view

Julia complained to FSCL. By this time, she had lost faith in the trustee. She had spent many, many hours – over 100 - working on the complaint on behalf of her siblings. She rejected the settlement offer. She wanted to use FSCL’s process to gain access to the trustee’s entire file (which went back for around 40 years), so that she could see for herself whether the trustee had made other errors, with the aim of articulating new complaints for FSCL to investigate. She also wanted the trustee to refund every fee it had charged since it prepared her grandfather’s will.

 

The trustee’s view

The trustee considered that its settlement offer was sufficiently generous, and that Julia’s complaint was ‘deadlocked’ (in other words, that it was unable to take her complaint any further).

 

Review

We noted that the trustee’s entire file had been reviewed at the highest levels within the trustee organisation. During those reviews, the trustees had identified errors and made them known to Julia and her siblings. There was no basis to suspect that the trustee might have concealed or overlooked other errors. We also considered that the $10,000 goodwill payment was so large that it would more than ‘sweep up’ any other minor error, if any other error existed.

We considered that Julia wanted the entire file so she could try and find a basis for further complaint. However, FSCL’s role is to help resolve complaints, not to help find something else to complain about. As in a court case, complainants cannot seek documents so that they can go ‘fishing’ for further bases for complaint.

We noted that the trustee had already compensated Julia and her siblings for direct financial loss. FSCL can only award compensation for non-financial loss to a maximum of $2,000.

We did not consider it reasonable for the trustee to refund all fees charged since it prepared Julia’s grandfather’s will. At the behest of Julia’s late grandfather, the trustee had performed a service over many years for which it was entitled to be paid.

 

Outcome

The trustee revived its offer of a $10,000 goodwill payment. We formed a preliminary view that Julia’s complaint fell outside FSCL’s terms of reference. The $10,000 goodwill payment the trustee had offered was significantly higher than anything FSCL could award and was a reasonable settlement offer. We encouraged Julia to accept the offer on behalf of herself and her siblings, and she did so.

 

Key insights for the complainant

Occasionally a complainant will spend many hours on a dispute with a participant. However, FSCL cannot compensate a complainant for that and, sometimes, it is better to accept a generous offer than to continue to try to find more to complain about.

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