The basis on which trust beneficiaries can compel the production of trust documents has been the subject of debate in Canada. Historically, English jurisprudence recognized that beneficiaries with a proprietary interest in trust property also possessed a corresponding “proprietary right” to view trust documents. Over time, however, as estates and trusts became more complicated and sophisticated, the proprietary rights theory was discarded in favour of other analytical frameworks for disclosure, including the “common interest” theory and the “modern” theory.
Given how the law evolved, it has been unclear whether the proprietary rights theory could still be used to ground an application for the production of trust documents. At last, this uncertainty has been resolved, at least in British Columbia, with the Court of Appeal’s recent decision in Yurkiw Estate v Yurkiw, 2026 BCCA 149. The Court confirmed that the proper framework to apply to requests for document production must be determined on a case-by-case basis, and that the traditional proprietary rights framework can still be utilized in appropriate cases.
Background
In Yurkiw, an estate beneficiaryapplied for an order requiring the estate administrator to produce its file after the administrator applied to pass the estate’s accounts. A judge in chambers granted the production order, recognizing the general principle that a beneficiary has a right to view documents created by an administrator during the course of estate administration.
After some documents were produced, the beneficiary applied to the court again for the administrator’s entire file, including its solicitor’s file, taking the position that the production provided fell short of what was required. Again, the court granted the order, noting that “[t]he beneficiaries own the file,” albeit with some exceptions.
The administrator appealed, arguing that the judge erred in law in concluding that the estate beneficiaries owned the trust documents in the administrator’s possession.
Determining the Proper Framework for Production
Writing on behalf of the panel, Justice Gomery noted that three different theories have been used to determine what trust documents beneficiaries are entitled to obtain:
- The first is the “proprietary right” theory, which is premised on the notion that documents in the trustee’s possession pertaining to the trust are also owned by the beneficiary, in keeping with the beneficiary’s equitable right of ownership.
- The second is the “joint interest” theory (also known as the “common interest” theory), which focuses on the joint interests of the beneficiaries rather than proprietary rights. This theory, discussed in Ontario (Attorney General) v. Ballard Estate, 1994 CanLII 7513 (Ont. Gen. Div.), recognizes that beneficiaries who have no equitable ownership in trust property, such as contingent beneficiaries and the objects of a power of appointment, still have beneficiary rights.
- The third is the “modern” theory (also referred to by the court as the “balancing” theory), articulated by the Privy Council in Schmidt v. Rosewood Trust Limited, [2003] 3 All E.R. 76 (U.K.P.C.) and applied in Erceg v Erceg, 2017 NZSC 28. This theory focuses on the supervisory jurisdiction of the court in equity and the importance of balancing competing interests when determining which trust documents are to be disclosed to a beneficiary.
Justice Gomery went on to explain that the joint interest theory and the balancing theory are not modern replacements for the proprietary rights theory. Even though the proprietary rights theory is not suitable for all trust cases, Justice Gomery recognized that it does describe “many cases reasonably well” and that “[t]he central intuition upon which it is founded – that the owners of the property are entitled to obtain documents in the trustee’s possession that contain information about the property unless there are good reasons to say otherwise – is sound.”
Given the diversity and complexity of trust law and the range of circumstances in which production may be sought, the Court of Appeal recognized that none of the theories are perfectly suited to every case. Accordingly, the Court directed that when beneficiaries seek the production of trust documents, the Court’s first task “is to choose the analytical framework best adapted to the trust and circumstances at hand.”
Application
Given that the estate in Yurkiw only had two vested beneficiaries, Justice Gomery held that the proprietary rights theory best fit the circumstances, and that the judge did not err in holding that the beneficiaries were entitled to documents that contained information about the trust that were within the administrator’s possession or control. However, the Court did clarify that the administrator ought to be excused from producing duplicative, deleted or inaccessible records, and that the administrator also was not required to explain its retention priorities to the beneficiaries.
Conclusion
The Court of Appeal’s decision in Yurkiw Estate confirms that no single theory governs every beneficiary request for document production. Rather, courts must select the analytical framework best suited to the nature of the trust and the circumstances of the case. Importantly, the decision makes it clear that the traditional proprietary rights approach remains a viable basis for production in appropriate cases, notwithstanding the development of the common interest theory and the modern balancing theory in more recent jurisprudence.
For trustees, estate administrators, and beneficiaries alike, the decision provides welcome appellate guidance in an area of trust law that has historically been unclear.
Thank you for reading, and enjoy the rest of your day!
Suzana.