Most families take great care deciding who gets what, and almost none deciding what happens if they later disagree. A trust deed, Will or family constitution that says nothing about disputes leaves the family with one default forum: the court.
For Chinese and other Asian families, whose trust may hold the family business, Melbourne property and accounts in Singapore or Hong Kong, and whose members live in several countries, a few lines agreed in advance can save years of conflict. This article explains what a mediation clause should say and how a mediated settlement can be made to hold, including across borders.
Why the dispute process belongs in the documents
Trustees of Asian family trusts usually have very wide discretionary powers over who receives income or capital, when and in what form. That breadth gives the family flexibility, but when one branch feels unfairly treated there is little in the deed to point to except the discretion itself.
In our view, most of these disagreements are best talked through within the family first, with a neutral person if needed, before anyone sends a lawyer’s letter. A clause that sets out that path makes it the expected course rather than a sign of weakness, and gives the trustee authority to invite everyone to the table.
What going to court really means
- Publicity. Trust litigation in Australia is generally heard in open court and judgments are usually published. Family finances and private correspondence can become public and searchable for years.
- Costs against the amount at stake. Legal costs do not shrink because the dispute is small. Where the amount in issue is modest, fees can consume much of it, and they often come out of the very fund the family is arguing over.
- The trustee’s own exposure. A trustee who acts properly is generally entitled to be reimbursed from the trust for its legal costs. Once proceedings start, its conduct is examined. If it is found to have acted improperly, it may lose that indemnity, be ordered to pay costs personally, or face a claim for breach of trust.
A court will also look at the substance: whether the trust holds passive cash or profits from an operating company, and each branch’s needs, such as how many children it has and their education. Mediation lets the family address those same matters practically, without a judge deciding for them.
Mediation, arbitration and expert determination
- Mediation is a facilitated negotiation. A trained, neutral mediator helps the parties understand each other and narrow the gap. The mediator decides nothing; any outcome is the parties’ own.
- Arbitration is private adjudication ending in a binding award. It is confidential but still adversarial, and whether trust disputes can be arbitrated so as to bind all beneficiaries is uncertain in Australia.
- Expert determination refers a narrow technical question, such as the value of shares or land, to an independent expert. It suits valuation disputes, not disputes about fairness.
Confidentiality, “without prejudice” and private sessions
Mediation is confidential, and what is said in an attempt to settle is generally protected as “without prejudice”. Under the uniform Evidence Acts that apply in Victoria, New South Wales and federal courts, it generally cannot later be used as evidence. People can speak openly and make offers without fear they will be held against them.
A good mediator also meets each party privately. There, a family member can say what they would never say in front of a sibling or parent: the real reason for their position, what they could accept, or what they fear. The mediator keeps this confidential unless permitted to share it, and uses it to find common ground.
What a good mediation clause says
- Who appoints the mediator: a named mediator or panel, or a body that appoints one if the parties cannot agree within a set time.
- Timing: what triggers the clause, how long the parties have to mediate, and that court proceedings wait until then, except for urgent relief.
- Language: for many families, a Mandarin- or Cantonese-speaking mediator or interpreters, so older members can take part properly.
- Venue or online mediation for family members in different countries.
- Costs: whether the mediator’s fees come from the trust or estate or are shared, and that each party bears its own legal costs.
- Escalation: family meeting, then mediation, then expert determination for valuation questions, with court or arbitration last.
Australian courts have enforced dispute resolution clauses that set out a sufficiently certain process, so precise drafting matters.
Does a clause in a trust deed bind the beneficiaries?
This is not settled. Beneficiaries usually do not sign the deed, so the ordinary basis for enforcing a contract against them is missing. The clause binds the trustee more clearly, as part of the terms on which it holds office. Whether a beneficiary can be compelled to mediate before suing is unclear in Australia, and some offshore jurisdictions have legislated on the point. A clause still has value: it sets expectations, authorises the trustee to pay for mediation, and courts can in many cases refer disputes to mediation with or without consent.
In a Will, a mediation clause mainly directs the executor and records the will-maker’s wishes; it cannot stop an eligible person bringing a family provision claim. A family constitution is usually not legally binding, so its dispute steps should be carried into documents that are, such as the trust deed, a shareholders’ agreement or a deed signed by family members.
Making a settlement hold across borders
The United Nations Convention on International Settlement Agreements Resulting from Mediation (2019), the Singapore Convention on Mediation, allows mediated settlements to be enforced directly in member countries. Australia signed it in September 2021 but, as at October 2026, has not ratified it, so it does not yet apply here. Singapore and Japan are parties; China and Malaysia have signed but not ratified.
More importantly, the Convention covers only international commercial settlements. It expressly excludes settlements made for personal, family or household purposes and those relating to family, inheritance or employment law. Most family trust and estate disputes will therefore fall outside it.
A family settlement is usually made binding by:
- a deed of settlement signed by the trustee and all adult beneficiaries, with releases;
- consent orders, if proceedings have begun; and
- court approval where minors, people without capacity or unborn beneficiaries are affected, since no one can bind them by agreement alone.
Where assets or parties are overseas, local advice is needed on how the deed or orders will be recognised there.
A practical checklist
- Review the trust deed, Will, company constitution and family constitution for existing dispute provisions.
- Agree the escalation steps, language, venue, mediator or panel, and who pays.
- Amend the trust deed if its variation power allows, and carry the steps into binding documents.
- Explain the process to the next generation before they need it.
Frequently asked questions
Can you put a mediation clause in a trust deed?
Yes. A new deed can include one, and an existing deed can often be amended if its variation power allows.
Is a trust dispute mediation clause binding on beneficiaries?
It binds the trustee more clearly than beneficiaries, who usually have not signed the deed. Australian law is unsettled, but the clause still sets expectations and supports a court referral to mediation.
Is a mediated settlement legally binding?
Once properly documented, usually as a signed deed or consent orders. A settlement affecting minors or people without capacity may need court approval.
Does the Singapore Convention apply to family trust disputes?
Generally no. It covers international commercial settlements, excludes family and inheritance matters, and Australia has not ratified it as at October 2026.
How Chua Tan Associates can help
Chua Tan Associates helps families build their dispute process into trust deeds, Wills and family governance documents before a disagreement arises, and helps resolve disputes when they do. We draft mediation and escalation clauses for families spread across several countries, advise trustees on their position, and document settlements so they hold. Justin Chua is a Nationally Accredited Mediator and Family Dispute Resolution Practitioner, and an Accredited Family Business Advisor, and he trained in accounting, so he understands both the family dynamics and the numbers behind a trust dispute. We assist clients across Australia and overseas, work with local lawyers in other countries, and advise and mediate in English, Mandarin and Cantonese, including online.
Related reading
Chua Tan Associates acts for families, executors, trustees and their professional advisers in estate planning, estate administration and estate disputes in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice.
简体中文 
English (Australia) 
繁體中文