It may seem surprising, but lost trust deeds are far more common than you may think. 

A trust deed is the legal document that sets out the rules for establishing and operating your trust. If you have lost the trust deed, your remedies are limited and there can be significant impacts in the event of a dispute. 

Why it's important 

If there is a dispute as to the terms of the trust deed, then there may be difficulties in relying on an unsigned copy of the trust deed. This is because if it is unsigned, then it is most likely unstamped and the unstamped trust deed prima facie cannot be used as evidence in court: s304 Duties Act 1997 (NSW). In other words, it is as useful as a blank piece of paper. 

If the trust holds dutiable property and there is a desire to change the trustee of the trust, then the NSW Office of State Revenue will want to see a stamped copy of the trust deed before it will stamp the transfer with nominal duty ($50). 

Third party financiers (e.g. a bank) will often want to see the trust deed to ensure that the trust is authorised to borrow the funds and to enter into the security documents. 

A trustee has a duty to ascertain the terms of the trust and a failure to comply with the terms of a trust can lead to a trustee’s actions being set aside as invalid and expose the trustee to a claim by the beneficiaries that the trustee make good any loss suffered by them as a result of the invalid actions. 

A trust can only carry on a business where the trust deed expressly or impliedly permits this: Southwell -v- Martin (1901) 1 SR (NSW) Eq. 

What if a copy of the stamped signed trust deed is found?

If a copy of the stamped signed trust deed is found then this is generally sufficient to continue without any further action however sometimes a financier will want to sight the original stamped and signed copy of the trust deed and therefore a replica trust deed must be prepared. 

In New South Wales a replica trust deed involves the settlor and the trustee executing a new trust deed whose terms are exactly the same as the old trust deed and then having that trustee complete the Replica Instruments Form at the OSR. 

Where the Commissioner of Stamp Duty considers that the original trust deed was duly stamped, then only nominal duty is payable on the replica deed – s 272 Duties Act 1997 (NSW). 

But this may now fall foul of the newly introduced s 8AA of the Duties Act 1997. It was introduced on 19 May 2022. Section 8AA charges duty on the making of a statement that has the effect of acknowledging that identified property vested in the person making the statement is already held on trust for the purpose mentioned in the statement. 

So acknowledgements of existing trusts are themselves as dutiable as the existing trust deed was and in fact more so if the trust has more dutiable property when the acknowledgement was made than when it was first created. The duty is calculated on the value of the dutiable property as at the date of acknowledgement. 

What if the unstamped signed trust deed is found?

In New South Wales, the original trust deed can be stamped out of time. That is, it can be stamped after the usual three month period for stamping has expired. The procedure is to lodge the trust deed at the OSR together with a statutory declaration evidencing the assets in the trust (for example, assume  the $100 settlement sum) at a time when the trust was declared. The duty on the trust deed would be $500  plus interest if the trust was created on or after 1 January 2009. 

What if a copy of the unstamped signed trust deed is found?

The procedure of the OSR is generally to stamp the photocopy as a copy under s 299 of the Duties Act 1997 (NSW) and then follow the procedure referred to above. 

Sometimes the OSR requires evidence that the trust was established and that evidence can usually be provided by a statutory declaration from the trustee or settlor attaching financial accounts and bank statements. 

What if a copy of the unstamped unsigned trust deed is found?

If the settlor and trustee now sign the trust deed there is a risk that ad valorem stamp duty will be triggered by the application of s 8AA of the Duties Act 1997 (NSW) referred to above. 

One way which was previously used to prevent ad valorem stamp duty being triggered, was to have the settlor (if they were still alive) or the trustee sign a statutory declaration affirming that an unsigned copy of the trust deed was annexed to the statutory declaration but this is also now a high risk alternative having regard to s 8AA. 

What if no copy of the trust deed can be found?

This is a real problem. There are only limited options. 

The first is to continue to operate the trust in accordance with the limited powers that the Trustee Act 1925 (NSW) provides; or 

Secondly, you could apply to the Supreme Court for an order that it exercise its power under the Trustee Act to adopt a new restated trust deed.

Applying to the Supreme Court 

This is the most costly option and essentially you need to know the general terms of the trust deed. Try to find a similar trust deed from the same trust provider with the view to determining the beneficiaries, the trustee, the settlor and the date of establishment of the trust. 

Section 21 of the Trustee Act 1925 (NSW) empowers the Supreme Court to make orders in respect of trustee powers including an order which amends the terms of the trust. You could apply for an order that the terms of the trust be those contained in an unexecuted restated trust deed so as to provide certainty for the administration of the trust. 

But the content of the restated trust deed cannot be just made up. Case law indicates that where an original document has been lost and secondary evidence is tendered in court to establish the contents of a lost document, there must be “clear and convincing proof not only of the existence, but also on the relevant contents, of the writing”: Maks –v- Maks (1986) 6 NSWLR 34 at [37]. 

Conclusion

The best course of action is to take every step to avoid losing the trust deed in the first place. 

Keep your Trust Deed with your solicitor or accountant and make numerous copies when the trust deed has been signed, dated and stamped and the bank account opened and the settled money paid.